I am making this statement to update hon. Members on expenditure incurred under section 13 of the Energy Prices Act 2022 (EPA), in accordance with the statutory requirement to provide quarterly reports to Parliament.

This quarterly report is required under section 14 of the EPA. It covers expenditure incurred from 1 July to 30 September 2026 under the Renewables Obligation to Exchequer scheme.

The Renewables Obligation to Exchequer scheme was announced at Autumn Budget 2025 as part of the Government’s package to reduce energy Bills for households. It came into effect on 1 April 2026 and will run for three years. Under the scheme, 75% of Renewables Obligation costs are removed from domestic electricity bills and funded instead by the Exchequer, thereby reducing costs for consumers.

The expenditure set out in this report relates to the delivery and operation of the scheme during this reporting period, as well as the cumulative spend to date.

NOTE: The expenditure figures set out above relate to Great Britain only, reflecting the territorial extent of this scheme, which applies in England, Scotland and Wales.

The figures in the table do not include administrative or running costs.

The expenditure incurred between 1 July and 30 September 2026 includes an adjustment for the first quarter of this financial year, reflecting the reconciliation between forecast and actual supply volumes. A reconciliation between forecast and actual supply volumes for the period 1 July to 30 September 2026 will be calculated, paid and reported as part of the Quarter 3 payment cycle.

All former energy affordability schemes under which s.13 EPA expenditure has been incurred have now closed, and their final expenditure positions have been fully reconciled. The table below sets out the cumulative expenditure incurred under those schemes.

Future costs

At Autumn Budget 2025, the expected cost of the Renewables Obligation to Exchequer policy was estimated as follows:

Exchequer impact (£m)

NOTE: Costs for the Renewables Obligation to Exchequer policy are based on forecasts costs of the overall Renewables Obligation scheme and an assumption of the proportion of electricity usage that relates to domestic consumption. Actual costs will vary depending on actual domestic supply volumes and the actual Renewables Obligation and buyout price.