Draft Electricity Capacity (Amendment) (No. 2) Regulations 2015

Alan Whitehead Excerpts

Monday 12th October 2015 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Percy. The changes put forward in the regulations are unexceptional and uncontroversial, so the Opposition will not seek to divide the Committee. This is a useful occasion, however, to seek a little clarification from the Minister on the wider purposes of the changes.

Although, as we have heard, the changes were consulted on in the spring, it looks as if the main change to the regulations passed into law last year is perhaps to correct an omission. It appeared that CCS projects that had received some kind of grant support, through either European Union funding or departmental grant arrangements for early-stage developments such as front-end engineering and design, might be in a difficult state of definition as far as the pre-qualification arrangements are concerned because someone had not put the right wording in the 2014 regulations.

I welcome the new, proper wording, which clarifies the circumstances under which CCS projects will be not disadvantaged if they have received a grant, or advantaged if they have received a grant specifically in relation to a capacity market unit. Nevertheless, a problem still appears to arise, because as far as I am aware, the Government do not intend to enable CCS to access operational support to capacity markets. Indeed, on the contrary, the Government’s intention, which they made clear in their scoping document this spring, is that whereas grants will be available in advance of a contract for difference being issued for the operation of a CCS plant, operational support should in principle take place through some form of modified CFD. In the long term, that closes the door to support of any kind for CCS arising through capacity auctions, and I doubt whether any CCS developer is under any illusions otherwise.

Therefore, prudent though it may be to close the door on possible sloppy wording, I wonder whether the whole premise of the regulations is not a little redundant. Perhaps the Minister will help by clarifying those matters a little, unless CCS is intended eventually to pre-qualify for capacity auctions in its operational phases and across the board, which would be quite a turnaround in policy.