Energy: Winter Supplies
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, we continue to actively manage risks to the secure energy supplies on which we depend. Working with Ofgem and National Grid, we have introduced new electricity system balancing measures through which we expect de-rated margins to remain around 6.5%; this is within the reliability standard of 4%. Our gas infrastructure is resilient, and import infrastructure can meet nearly double our annual demand without even counting on significant domestic production. We also engage closely with the EU and our G7 partners on measures to increase the EU’s energy security.
Lord Ezra (LD)
My Lords, I thank my noble friend for her Answer, but will she kindly elaborate further on the security of electricity supplies? In view of the fact that the reserve capacity is down to very low levels, and that a number of stations have had unexpected outages—including Didcot B, announced today—can she indicate whether there are likely to be disconnections during peak winter conditions?
Baroness Verma
My noble friend is right to highlight the outages. However, as I stated in my initial Answer, the grid already has existing options for companies to receive payment to reduce the amount of electricity they are taking from the grid at a time of peak demand during winter months. They are finalising new agreements with additional power stations to provide reserve services following the recent loss to which my noble friend referred. The national grid has around three gigawatts of additional tools to boost supply when margins are very tight and is in the process of extending our mutual assistance arrangements with both France and the Netherlands.
Lord Lawson of Blaby (Con)
My Lords, the noble Lord, Lord Ezra, has rightly drawn the attention of the House to a truly alarming state of affairs, which is the direct result of subordinating over a number of years energy policy to the damaging, fundamentally immoral and futile demands of the Climate Change Act. Has my noble friend had time to study the outstanding GWPF lecture given by our right honourable friend Owen Paterson MP on this very subject only last week? If she has not, will she now do so?
Baroness Verma
As ever, I am grateful for my noble friend’s interventions because they enable me to highlight that, of course, we do have to look at the costs of any policy. However, we also need to look at the commitments we have made to reducing carbon emissions both in our global targets and in our national targets. I remind noble Lords that having a lower-carbon energy sector has brought in more than £45 billion worth of investment in electricity generation. That is a clear signal that we need a diverse range of energy supplies. I have not looked at my right honourable friend’s lecture notes but I will do so.
Lord Teverson (LD)
The Minister mentioned interconnectors, so does she agree that we have a meagre four gigawatts of interconnector supply internationally with the Netherlands and France? Should we not concentrate in terms of balance on increasing that supply, and in that way get a much greater single market in electricity within the European Union?
Baroness Verma
Again, my noble friend raises a very important point. Of course we are working very closely with our partners and we are looking at developing ways of enhancing interconnector supply. I agree with my noble friend that we have work to do, but work is in progress and it is progressing in the right direction.
Lord Pearson of Rannoch (UKIP)
Does Her Majesty’s Government agree that the crippling cost of the EU’s mad climate change policy, to which we are subservient, falls largely on people who cannot afford it? Does the widow’s mite come to mind?
Baroness Verma
No, my Lords. We have a sensible policy in this country, and people across the world look at what we are doing to encourage green energy as well as traditional fuels. If we are to leave a cleaner planet for future generations, we have a part to play.
Baroness Worthington (Lab)
My Lords, demand for energy has fallen so far this year. In the first half of this year we saw a 17.5% reduction in gas demand and a 5.7% reduction in electricity demand. People are walking around today in T-shirts. There is no need for the hysterical headlines that we are seeing about closures in plant. We have 25% of our energy today coming from wind. The question is: does the Minister agree that it is time to create an energy security board so that we can stop the alarmist headlines, have a mature debate and get our energy security and demand management policy back on track?
Baroness Verma
I agree with the noble Baroness that we need to have a sensible energy debate; maybe she could take that message back to her leader.
Lord King of Bridgwater (Con)
Can my noble friend tell the House that since the Leader of the Opposition announced a proposal to freeze electricity prices, what announcement has been made by any energy company of further investment in energy generation in this country?
Baroness Verma
My noble friend follows on from what I said in response to the noble Baroness opposite. We need a sensible energy policy and we are working towards a sensible debate. We have ensured that we are hard on energy companies where we see that they are not being fair to the consumer. We have brought in the CMA and have tightened Ofgem’s rules—so the Government have done a lot. Energy companies need to play their part, but we as political parties need to play ours.
Lord Stoddart of Swindon (Ind Lab)
My Lords, is the Minister aware that when I worked in the electricity industry for the CEGB, we needed 18% spare capacity? She is now trying to persuade the House that 4% spare capacity will give security of supply. Can I assure her that that policy—particularly since we have 25% of energy coming from wind power—is endangering security of supply, not only for industry but for all consumers as well? I hope that the Government will treat this as a matter of urgency, particularly in light of the fire at Didcot over the weekend.
Baroness Verma
My Lords, I think that I have made it clear through my responses that we are very aware of what we have in reserve. We are giving—and have given—powers to both national grid and Ofgem to ensure that we have enough supply.