Peers voted 262 to 215 against a compromise backstop measure to limit the running hours of unabated coal power stations beyond 2025.
The Lords had previously backed plans to immediately extend the Emissions Performance Standard to old coal plants undergoing “significant upgrades” as well as new coal plant. That change was reversed in the Commons.
The peers’ U-turn clears the Energy Bill’s path to Royal Assent.
Lord Oxburgh, who introduced the compromise, said the government’s reasons for opposing it were “pretty thin”.
The purpose of the move “is simply to provide an additional crumb of confidence to those who are thinking of investing in gas-fired power stations,” he said.
Baroness Verma, speaking for the government, said “we neither expect nor desire” large amounts of coal generation beyond 2025. She argued the change would “only delay the Bill and further undermine investor confidence”.
Labour peer Baroness Worthington asked why, if investor confidence were so important, government last week changed the rules for go-early renewable support contracts. That had placed Eggborough power station’s biomass conversion project in “deep jeopardy”, she said.
Baroness Verma declined to comment, citing commercial confidentiality.