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

Lord Purvis of Tweed Excerpts

Thursday 2nd July 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

In introducing this measure, the Minister said that it is necessary for the UK to remain compliant with the EU regulations. Is it the Government’s intention that we will continue to stay compliant with state aid regulations? If so, and the Minister is bringing this measure forward now to remain compliant, what is the timeframe for that compliance? Is it for the duration of this temporary measure only, or do the Government’s intend that we will remain compliant and able to continue operating seamlessly with the European market? Given that the Government have not carried out an impact assessment, what is the likelihood of this supporting smaller operators? What is the impact on bigger operators? There are many references to these powers possibly enabling operators, but what is the assessment of the likelihood of that? If it is an EU-based energy supplier, will it be able to benefit from this measure?

I want to quote to the Minister some remarks made in the House of Commons during the debate on this measure:

“I am very concerned about the regulation, its provenance and whether it will limit our freedom of manoeuvre in ways we do not wish from the beginning of next year … I therefore find it extremely worrying that we have responded to a state aid challenge upon us in the dying days of our membership of the single market, or its rules, when we are no longer a member of the European Union which sponsors it.”—[Official Report, Commons, 15/6/20; col. 566.]


That was Sir John Redwood. I have never doubted the Minister’s credentials as a Brexiteer. He has reminded us of that on far too many occasions over the past of couple of years. So, can he explain why Sir John Redwood is so wrong and why we need this measure urgently in order to continue to be compliant with EU state aid regulations?

The Minister said that the measure will end on a specified date. What is the process for deciding that specified date? As we know, the impact of coronavirus, and potentially other waves, is an unknown situation. I think there is common ground across the House about the benefits of reforming the electricity market and the capacity market, and of paying for reliable sources of capacity alongside electricity revenue. I do not think there is any doubt about that. Sir John Redwood also said,

“we are talking about whether this country is now going to have its own energy policy, or whether we are hastily legislating so that we can, for the foreseeable future, still be effectively under EU state aid rules, edging ever closer to integration with EU energy policy”—[Official Report, Commons, 15/6/20; col. 568.]

Will the Minister say why Sir John may be wrong on that point? Bearing in mind that we are likely to get up to 10% of our energy from the European market, given the way the state aid rules operate, for how long will we be compliant with those rules?