Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to develop local energy distribution networks to respond to a potential increase in domestic electricity consumption.
Answered by Chris Skidmore
Electricity distribution networks are regulated by the independent energy regulator, Ofgem, and, by law, network regulation must be carried out independently of Government. Under the existing regulatory framework, distribution network operators are allowed to increase capacity on their networks to accommodate expected growth in demand from domestic electricity consumption.
Energy networks require significant investment in order to ensure that Great Britain has a secure, dynamic energy system that is fit for the challenges of the future. BEIS estimates that between 2010 and 2017 £35bn has been invested to upgrade, reinforce and extend the electricity networks (both transmission and distribution) and a further £14bn may need to be invested between by 2020. Ofgem's RIIO 2 price control will set out the pathway for investment in our energy networks through the mid-2020s.
Government expects network companies and regulators to act in the best interests of consumers including in relation to more active system management as per the Government and Ofgem’s Smart Systems and Flexibility Plan. We are already seeing distribution network operators manage their systems more actively, and make more innovative use of data and smart technologies. For example, all six DNOs in Great Britain have now committed to open all significant network reinforcement to competition with flexibility services.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what plans the Government has for the development of tidal energy resources.
Answered by Claire Perry
The Government has a long history of supporting the development and deployment of tidal stream technologies in the UK. Since 2010, various bodies across Government have made almost £80m of grant funding available to the wave and tidal stream sectors. Tidal stream projects are eligible to enter the forthcoming Contract for Difference allocation round.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what level of support the British Business Bank has provided to businesses in Scotland in each year since its establishment.
Answered by Kelly Tolhurst
Since its establishment in 2014, the British Business Bank has facilitated over £27.6m to 684 Scottish businesses in the 2014/15 financial year (FY), over £81.9m to 1,484 Scottish businesses in FY 2015/16, over £267.5m to 1,895 Scottish businesses in FY 2016/17, and over £291.6m to 2,881 Scottish businesses in FY 2017/18. These figures include Start-up loans from 2014.
Since launching in 2012, the BBB Start-Up Loans programme specifically (which became part of the Business Bank in 2014) has issued over 3,500 loans in Scotland, averaging £7,200 each and worth over £25m in total.
The British Business Bank is a Limited Partner for the three largest VC funds in Scotland (SEP, PenTech, and Panoramic) with over £80m invested in innovative, high growth companies.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy why Contracts for Difference (CfD), for what reasons strike prices have been higher for dedicated biomass technologies than for offshore wind during CfD allocation rounds two and three.
Answered by Claire Perry
In CfD Allocation Round 2 dedicated biomass and offshore wind cleared at the same strike price of £74.75MWh for delivery year 2021/22.
The Administrative Strike Prices (ASPs) set out the maximum support that the Government is willing to offer developers for each technology in a given delivery year. In setting the ASPs, the government has drawn upon the latest generation cost data, while also considering market conditions, policy considerations and other technology specific factors in order to encourage new investment whilst ensuring value for money for consumers.
The methodology used to determine the draft ASPs for the third allocation round is published here: https://www.gov.uk/government/publications/contract-for-difference-cfd-third-allocation-round-methodology-used-to-set-administrative-strike-prices
CfDs are awarded in a series of competitive auctions, with the lowest price bids being successful as a means of driving cost reduction and project efficiencies.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make it his policy to create parity under Contract for Difference allocation rounds two and three between dedicated biomass with CHP and offshore wind; and if he will make a statement.
Answered by Claire Perry
A draft budget notice was published in November 2018, which outlined the proposed Administrative Strike Prices (ASPs) for all technologies eligible to compete in the next allocation round, this notice can be found here: https://www.gov.uk/government/publications/contracts-for-difference-cfd-draft-budget-notice-for-the-third-allocation-round
In setting the ASPs, the government has drawn upon the latest generation cost data, while also considering market conditions, policy considerations and other technology specific factors in order to encourage new investment whilst ensuring value for money for consumers.
The methodology used to determine the draft ASPs for the third allocation round is published here: https://www.gov.uk/government/publications/contract-for-difference-cfd-third-allocation-round-methodology-used-to-set-administrative-strike-prices
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial, if he will provide an update on the delivery of the Grangemouth Renewable Energy Plant which was awarded a Contract for Difference in 2017 as part of CfD allocation round two.
Answered by Claire Perry
The Low Carbon Contracts Company (LCCC) announced on 19 October 2018 its decision to terminate the contract for difference (CfD) awarded to Grangemouth Renewable Energy Plant for failing to make sufficient progress by the Milestone Delivery Date. The press release is available on the LCCC’s web site - https://www.lowcarboncontracts.uk/
CfDs are private law contracts between a generator and the LCCC, and decisions relating to whether a generator has met its milestone requirement are for the LCCC.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the value for money of the renewable heat incentive subsidy mechanism; and if he will make a statement.
Answered by Claire Perry
The Renewable Heat Incentive (RHI) compares favourably to other ways of saving carbon or generating renewable energy across the economy, contributes to our renewable targets, and plays a significant role in supporting supply chains in the renewable heating industry.
The Department for Business, Energy and Industrial Strategy (BEIS), and prior to BEIS, the Department for Energy and Climate Change (DECC) has made regular assessments of value for money in the RHI subsidy mechanism. The latest scheme Impact Assessment was made in February 2018 and is available on GOV.UK.
The RHI was reformed in 2017 and 2018 to focus on long-term decarbonisation, improve consumer protection, support supply chain growth and improve value for money for the taxpayer. These reforms included setting maximum heat demand limits for biomass, air source and ground source heat pumps in the Domestic RHI, removing wood drying as an eligible heat use for the Non-domestic scheme and giving Ofgem greater enforcement powers.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to the Committee on Climate Change’s Biomass in a Low Carbon Economy Report published in November 2018 and the Department of Environment, Food and Rural Affairs’ Clean Air Strategy published in January 2019, what plans he has for the future of the renewable heat incentive.
Answered by Claire Perry
In the Clean Air Strategy, the Government committed to consult on removing Renewable Heat Incentive Scheme support for new biomass installations in urban areas which are on the gas grid. The Government published the consultation Renewable Heat Incentive: Biomass Combustion in Urban Areas, seeking views on a number of proposals including the removal of RHI support for some or all or some new biomass boilers in urban areas, imposing geographical restrictions on biogas combustion and introducing regular maintenance checks on existing biomass boilers under the RHI. We will be publishing a government response to this consultation shortly.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make an assessment of the potential carbon and economic value generated by restricting the amount and type of wood that biomass plants in receipt of subsidies can use as fuel; and if he will make a statement.
Answered by Claire Perry
Biomass plants in receipt of subsidies must comply with the UK’s sustainability criteria. Plants with a capacity of 1 megawatt and above must also prepare an annual sustainability report, compiled by a third-party auditor, which will provide assurance that the biomass is from sustainable sources.
Wood is a globally trade commodity. Prices are influenced by global demand, currency exchange rates and weather conditions. Our Wood Fuel Disclosure Survey concluded that most of the wood fuel used for electricity generation in the UK is imported and that the volumes of UK wood used are expected to remain constant.
Energy markets have grown in recent years and this has benefited woodland owners and contractors who have increased harvesting rates. Availability forecasts suggest there is potential to increase production further if businesses are willing to invest in the supply chain and encourage more woodland owners to enter the market.
Asked by: Stephen Kerr (Conservative - Stirling)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, information his Department holds on the fuel sources for district heating systems delivered under the Government’s Heat Networks Investment Programme from April 2019, and if he will make a statement.
Answered by Claire Perry
In December 2018 we published in ‘Heat networks: Developing a market framework’ our estimate of the fuel sources that will be used in projects that will come forward under the Heat Network Investment Project. The assumed technology mix is displayed in the figure below. The estimate is based on analysis of HNIP pilot data and surveys of the project pipeline. The estimate is dynamic as it is assumed original CHP plants are replaced with lower-carbon systems at the end of their operational life.
The estimated technology mix is 22% gas back-up boiler, 33% gas CHP, 20% EfW incinerator, 5% biomass, 10% heat pump and 10% waste heat recovery.