Electricity Supply: International Interconnectors

(Limited Text - Ministerial Extracts only)

Thursday 26th January 2017 Lords Chamber

[The Lord Bishop of Chester]

To ask Her Majesty’s Government, at peak electricity demand, what level of supply is expected to be available through international interconnectors.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

My Lords, Britain currently has 4 gigawatts of interconnection capacity with neighbouring countries, which feeds into the country’s 55 gigawatts at peak demand. For security of supply purposes, we do not count on interconnectors providing their full capacity. For 2021, we expect interconnectors to be able to provide 2.2 gigawatts through a time of system stress.

[The Lord Bishop of Chester]

My Lords, if we are to depend upon 2 gigawatts-plus when there is currently just under 1 gigawatt coming in because of the cold weather on the continent, what contractual arrangements—I underline “contractual”—will exist to guarantee that 2.2 gigawatts?

[Lord Prior of Brampton]

My Lords, I am not sure; I will have to write to the right reverend Prelate on that question. But more generally, the electricity provided through the interconnectors is a flexible supply. It can go either way, into or back from the continent, depending upon differential prices in the two markets. It is not part of our baseload capacity.

[Baroness Featherstone (LD)]

My Lords, 11.6 gigawatts of capacity from interconnectors has been paused because of Brexit. A key factor in ending that pause—as the Minister said, it will give us our security—will be whether the UK remains in the European internal energy market. What priority does this have with Her Majesty’s Government?

[Lord Prior of Brampton]

I do not think there will necessarily be any impact from Brexit on the interconnector market. We are committed to building another 7.7 gigawatts of capacity and, in the Budget of 2016, we increased that to an additional 9 gigawatts of capacity by 2021. We are going to increase the amount of electricity flowing both ways through the interconnector system.

[Lord Oxburgh (CB)]

My Lords, as the Minister is undoubtedly aware, last Tuesday, 17 January, we received nothing through our interconnectors. Wind and other renewables generation in the country made up 2% of our supply and the remainder came from gas, coal and nuclear. Does he agree that to keep the lights on and to ensure security of supply in the country, we must have a minimum amount of dispatchable generation which can meet that demand and, furthermore, that that dispatchable supply is likely to be gas with carbon capture and storage? I declare many non-pecuniary interests in carbon capture and storage.

[Lord Prior of Brampton]

My Lords, I have an app on my phone through which I can tell exactly where all the electricity is coming from at any time. That 2% from renewables is very low; obviously, the wind was not blowing that day. The noble Lord is absolutely right that our baseload is provided by gas, coal and nuclear and I assure him that, in its Winter Outlook Report of October 2016, the National Grid said that we had an electricity margin of 6.6%, compared to 5.1% for the same period last year. There are no current concerns about security of supply.

[Lord Elton (Con)]

My Lords, my noble friend has repeatedly said that the current can flow in both directions. Can he tell us in which direction it will flow when both the continent and this country are in the grip of acute conditions? Will that be determined by market forces, by contractual decisions or by political agreement?

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[Lord Prior of Brampton]

I think that the right reverend Prelate also raised that question and I do not know what the contractual arrangements are. I will have to write to my noble friend if this is not correct, but my understanding is that the flow of electricity to or away from us depends upon market conditions in the two countries—that is, the price differential between them. If there are contractual arrangements, I will write to my noble friend accordingly.

[Lord Grantchester (Lab)]

My Lords, I welcome the Minister to his new responsibilities, and will follow up on some of the earlier questions. The EU norm for interconnection is currently about 10% of capacity and at present the UK has only 4% covered by interconnectors. Can the Minister confirm how many might come on stream between 2018 and 2023, and to what increased capacity? Notwithstanding his earlier answer, what guarantees can the Government give to ensure their status upon Brexit and access to the single energy market in the EU?

[Lord Prior of Brampton]

My Lords, the current percentage of our market supplied by interconnectors is, as the noble Lord says, around 4%. It is due to grow considerably between now and 2021. An additional 7.7 gigawatts of capacity are due to come on stream. As said, under Budget 2016 it may increase to 9 million gigawatts, but that will be post-2021.

[Lord Tugendhat (Con)]

My Lords, does my noble friend agree that security of supply should be a pre-eminent objective of energy policy; that self-sufficiency has an important role to play; and, in that context, that we will continue to rely on fossil fuels for a very long time to come?

[Lord Prior of Brampton]

I agree with my noble friend that security of supply is of paramount importance and that we will continue to rely on gas and, to a declining extent, coal in future. Of course, nuclear will form an increasingly important part of our baseload.

[Lord Broers (CB)]

My Lords, can the Minister reassure us that the Government are going ahead with the small modular nuclear reactor competition that was announced some time ago?

[Lord Prior of Brampton]

My Lords, I am aware of the small modular nuclear reactor programme. I will have to write to the noble Lord to tell him where we have got to in that process.

[Lord Berkeley (Lab)]

My Lords, will the Minister explain his answer on the Government wanting more nuclear? There are reports in France that there is a very serious shortage of power because so many of the nuclear power stations are on stop because they are breaking down—and that is before France starts operating its new one. Is it therefore not likely that there will be nothing coming from the interconnector for quite a few years, so should we not have alternative arrangements for the interim?

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[Lord Prior of Brampton]

My Lords, we are putting in extra interconnector capacity, as the noble Lord knows. The problem in France is that much of their nuclear plant is getting quite old. It is one reason why we are investing more heavily in nuclear in this country.