Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether they have made any estimates of the potential cost savings that could be made by securing a greater supply of large scale, long duration electricity storage.
Answered by Lord Henley
In 2016 the Government commissioned a study into the benefits of a smart, more flexible energy system, which found that the UK could save £17- 40 billion across the electricity system to 2050 by deploying flexible technologies. These include demand side response and a range of storage technologies. Long duration storage can provide additional security of supply benefits over those provided by short duration storage, and we have recently amended the Capacity Market rules to reflect this.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what assessment, if any, they have made of the potential benefits of implementing a regulatory definition of electricity storage based upon the definition currently used for interconnector capacity.
Answered by Lord Henley
Our 2016 call for evidence on a smart, flexible energy system sought views on how to define electricity storage in legislation and other regulation. A large number of respondents agreed that the definition developed by the industry group, the Electricity Storage Network, provided the best basis for this. Very few respondents suggested basing the regulatory definition on that used for interconnection. In the Smart Systems and Flexibility Plan, published in July 2017, the Government committed to define electricity storage in primary legislation using the Electricity Storage Network’s definition as a basis, when Parliamentary time allows.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government how many gigawatts of large scale long duration electricity storage, of over four hours, was on the National Grid last year; and what assessment they have made of the total requirement for this year.
Answered by Lord Henley
Long duration storage, in the form of pumped hydro, accounted for just under 3GW capacity in GB last year. National Grid, as System Operator, takes a technology neutral approach to securing services that meet the needs of balancing the electricity system, and is in the process of setting out future needs through their System Needs and Product Strategy.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what steps they are taking to ensure regulatory alignment in the energy market after Brexit.
Answered by Lord Henley
The Government’s priority is to maintain affordable, clean and secure energy supplies for businesses and households. As part of this we share the EU’s ambition to make energy trading easier and more efficient by opening up national markets and increasing the level of interconnection between them.
We want to continue arrangements which allow the efficient trade in electricity and gas, both on the island of Ireland, and between the UK and continental Europe.
We continue to closely collaborate on current and future regulatory and technical arrangements. For example, I was pleased to be able to represent the Government at the Energy Council on 18 December at which General Agreements were reached on four legislative proposals within the Clean Energy package.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what assessment they have made of the appropriateness of membership of the Energy Union after Brexit.
Answered by Lord Henley
The Government is currently considering all aspects of its future relationship with the EU, including in energy. Our priority is to maintain affordable, clean and secure energy supplies for businesses and households.
The UK will remain closely linked to our European partners after the UK’s exit from the EU, including physically as regards to electricity and gas interconnectors, and we continue to collaborate on current and future regulatory and technical arrangements.
As part of the negotiations on our future relationship, we would welcome a full and open discussion about all of the options for ongoing collaboration, including options for UK participation in EU programmes, agencies and other bodies.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what assessment they have made of the continuity in operations of UK interconnectors with continental Europe under the current regulatory framework.
Answered by Lord Henley
Electricity and gas interconnection in the UK is regulated through a combination of domestic legislation, EU regulations and network codes, regulatory licences, and industry codes. These rules provide a robust framework for operation as demonstrated by current flows across the interconnectors, which respond efficiently to market signals.
The future of this framework will be subject to negotiations with the EU, and the Government has made clear that we seek to develop a deep and special partnership with the EU on energy. Interconnection benefits countries on both sides of the link, through the value of the energy traded, the increased diversity of energy supply, and the flexibility that interconnectors provide for the electricity system.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what is their estimate of the number of asset closures the UK gas market could withstand without affecting energy prices or security of supply.
Answered by Lord Henley
The UK consistently has one of the largest and most liquid gas markets in Europe with extensive import infrastructure and a diverse range of gas supply sourcesThis winter we forecast 23% more daily capacity than peak demand. We are well placed to manage gas supply risks and any wholesale price impacts.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what are the specific financial interests which are referred to in the declaration of interest by Professor Dieter Helm published on 6 August in relation to the cost of energy review.
Answered by Lord Prior of Brampton
The review is being conducted in accordance with well-established principles for transparency and accountability, typical of this kind of independent review. As the declaration of interests makes clear, Professor Helm will not change any financial interest he might have in companies that are active in the UK energy sector during the course of the review.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether they intend to develop a strategy to ensure future continuity on network charging in relation to electricity storage; and if so, how.
Answered by Lord Prior of Brampton
The charging regime is the responsibility of Ofgem as the independent regulator. In the joint BEIS/Ofgem Smart Systems and Flexibility Plan released on 24 July 2017 it was recognised that at present network charges can put storage at a relative disadvantage to other network users, preventing a level playing field.
The Government is keen to see fair changes to the charging regime that create a level playing field for storage. Ofgem indicated that changes to storage charging would be best and most rapidly brought forward by industry, and two modifications have now been raised to address this issue. Ofgem also expects industry to provide guidance on the treatment of storage as intermittent or non-intermittent in the distribution charging methodologies by the end of 2017.
Asked by: Baroness Featherstone (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether they intend to remove the double charging of consumption levies in relation to storage facilities.
Answered by Lord Prior of Brampton
The Government and Ofgem’s Smart Systems and Flexibility plan, published in July, addressed the issue of storage operators paying levies intended for final consumers, on the electricity they procure from energy suppliers. Electricity supplied to generation licence holders is excluded from the supply volumes used to calculate the costs of the Renewables Obligation, Contracts for Difference and Feed in Tariffs schemes, and Capacity Market auctions. Ofgem will shortly consult on a new modified generation licence for storage facilities, which would mean that holders of this licence would not pay towards such levies.
The Government has also clarified that the electricity received and stored by electricity storage facilities may be supplied to them free from the Climate Change Levy where relevant conditions are met, as set out in HM Revenue and Custom’s Excise Notice CCL1/3 – Reliefs and special treatments for taxable commodities.