Electricity Capacity (Amendment etc.) (Coronavirus) Regulations 2020

Lord Moynihan Excerpts

Thursday 2nd July 2020 Lords Chamber

[Lord Moynihan (Con)]

My Lords, I fully appreciate that these regulations are narrow in purpose and I welcome them in addressing market providers who are facing current difficulties such as the termination of contracts for non-performance, timing extended to where the performance of the contract begins and how we can protect the continuity of the capacity market. However, as noble Lords have already pointed out, it is impossible to detach them from the past and present pressures on the capacity market, which secures our electricity supplies.

I hope that the Minister can address one specific question. I accept that these regulations provide the opportunity to meet some of the commitments that were given at the time of the EU annulment in 2018 to comply with state aid approval—there is very little mention of state aid approval in the documentation that accompanies the regulations. Were any commitments made at the time of that judgment which have not been included in these regulations and, if so, can we expect them to come back to this House or, indeed, are the Government looking towards the end of the year for a complete exit from that requirement?

In his introductory speech, my noble friend the Minister touched briefly on the broader context, and indeed in another place the Secretary of State went into greater detail. Indeed, a great deal has changed since I was a Minister for energy, and the White Paper will no doubt provide an opportunity for Members of this House to consider the consequences of technology-neutral auctions, decarbonisation, flexible pricing and the escalating cost and uncertainty of an essential nuclear programme.

However, I hope that the Minister can confirm today that natural gas-fired power generation should be a key part of the UK mix. In a living with Covid future, the re-stimulus of the global economy will have to be based on strong green roots, albeit that energy affordability will be a much stronger part of the post-crisis global policy debate than was the case before the coronavirus began to stalk the globe. Gas is an obvious partner for a global renewable industry which needs to prove to a post-crisis world that firm—which can never be the case for sun and wind—but affordable and reliable power can be delivered to the UK economy, which cannot afford the huge hidden costs of an ever-expanding renewable system: back-up costs, system balancing costs, curtailment costs, new grid costs and nascent battery storage scheme costs. It is gas which must and will continue to improve its environmental performance and should, I hope the Minister will agree, be an essential part of our energy balance.