Dozens of diesel farms stand to win millions of pounds in lucrative contracts to keep the UK’s lights on, sparking anger from environmental groups.
National Grid, which operates the UK’s electricity network, said small power generators had bid for 15-year contracts starting in 2020-21, as part of the government’s capacity market reforms.
The contracts, for firms that produce below 100MW, will see them paid to be on standby in case of a shortfall from power sources such as coal, gas or wind.
Of the total 8.7GW of back-up power that firms have offered, 3.9GW – more than the generating capacity of the Hinkley Point nuclear power station – is from generators who say they will burn either gas or diesel.
The companies could make up to £787m between them, depending on how many opt for diesel over gas and how many are successful in the final auction in December.
Diesel power firms submitted bids to provide just 0.87GW in last year’s auction, winning about three-quarters of their bids, worth some £176m.
The Department for Business, Enterprise and Industrial Strategy said it was unable to provide an exact figure for how much diesel generation had been bid for, although insiders said the true figure could be lower than 3.9GW.
But a spokesman said that even though diesel firms could be paid millions to be on standby, they were unlikely to contribute much to pollution because they would only run when there was a heightened risk of power shortages.
“Diesel generation accounts for less than 0.1% of total energy generation and will only ever be used for very short periods of time to provide instant electricity when it is needed.
“We are taking action on diesel emissions and all new diesel systems will have to comply with new emission controls,” the spokesman said.
A spokesman for climate change campaign group Sandbag said: “We are surprised and disappointed that so much new diesel could be built.
“There’s a risk we’re sleepwalking into a new generation of polluting diesel farms unless the government gets a grip on this. We need the right type of investment to help modernise our electricity system, and that certainly isn’t diesel.
“The government needs to ensure that the capacity auction is incentivising the right investment, rather than building a nationwide fleet of dirty diesel.”
Richard Black, director of thinktank the Energy and Climate Intelligence Unit, said the government should be doing more to encourage the use of battery storage and demand-side response, where firms agree to reduce or shift their energy usage.
“The capacity market is a necessary tool but it would be very sensible to design it so that it also fits in with the long-term objective of building a smart low-carbon system and fulfilling its aim of the UK becoming a world leader on battery technology,” Black said.
“They’ve missed a trick. They could have rewritten the rules and redesigned the capacity mechanism, they could have differentiated between clean and dirty energy and they chose not to.
“If they’d rewritten the rules to prioritise batteries and demand-side response then we might have more of those technologies available now.”
A spokesperson for Greenpeace said: “Britain is one of the world’s leading economies and the idea that in the 21st century we may have to rely on highly polluting diesel farms to keep the lights on is quite embarrassing.”