Millions of households face £200 jump in energy bills

Households face paying an extra £200 on their energy bills under plans to keep Britain’s lights on by building more gas-fired power stations.

Experts said the policy, announced by Rishi Sunak on Tuesday, would result in a bill of around £5bn for consumers, equivalent to £178 per household, most likely spread over a decade or more.

Tom Smout, of Aurora Energy Research, which conducted the findings, said: “What consumers are being asked to buy is energy security.

“The priority is to keep the lights on by having backup for the intermittency of renewables.

“An extra 5Gw of new backup generating capacity is needed to keep the lights on. Each gigawatt of capacity will cost about £1bn.”

Documents published on Tuesday by the Government said plans to boost Britain’s energy security by building more gas-fired power stations will be funded by bigger payments to plant operators, resulting in higher energy bills for homes and businesses.

Electricity generators will be paid via the so-called capacity market, an auction system that pays operators to be on 24-hour standby to deliver power when supplies become tight.

The plants will only be fired up when renewable sources like wind and solar fail to deliver, typically due to poor weather.

According to official estimates published on Tuesday, gas plants are only expected to be used for around 700 hours in 2030 – the equivalent of about 29 days.

The predicted figure for 2035 is below half of that and falls to less than 100 hours from 2040 onwards.

It follows a stark warning from ministers that for at least the next two decades Britain risks having too little generating capacity to keep the lights on.

Britain’s ability to generate electricity has become increasingly reliant on the weather as net zero targets spur a shift to renewable power sources such as offshore wind and solar power.

However, periods of low wind and less sunlight, a phenomena known as “dunkelflaute”, create problems for energy supplies as it causes renewable production to plummet.

Announcing the new gas-fired power stations on Tuesday, Claire Countinho, the Energy Secretary, said: “A weather-dependent, renewables-based electricity grid means we will need to have flexible power for when the wind doesn’t blow, and the sun doesn’t shine.

“Without gas backing up renewables, we face the genuine prospect of blackouts.”

Britain has about 32 gas-fired power stations with the capacity to generate about 27 gigawatts (Gw), enough to power around 20 million homes.

But uncertainty over energy policy during the past two two decades means few new ones have been built, leaving Britain with a fleet of ageing gas plants.

More than half face closure within the next few years, slashing generating capacity by 15Gw and leaving just 12Gw of existing plants available to the National Grid.

Another 9Gw of new capacity is already expected, which would take the total to 21Gw

But this falls short of the 22 to 28Gw of gas-fired plants that the Government estimates will be needed in 2035 to keep the lights on.

The new power stations would get most of their income from capacity payments – the money offered by the Government to build power stations and keep them on standby.

If, however, they switched on, they would get more money for the power they generated.

Kisha Couchman, deputy director of Energy UK, which represents suppliers, said: “The pathway to net zero set out by the Climate Change Committee does include a small role for unabated gas to ensure security of supply but the Government must also ensure that there is a clear decarbonisation pathway for these plants, either through carbon capture and storage or hydrogen.”

However, Baroness Brown, vice-chairman of the Climate Change Committee, said: “It is disappointing that the Government seems to be focused on fossil fuels as a stop gap and not long duration energy storage as a secure solution.”