Oral Answers to Questions
Debate between Tim Yeo and Matt Hancock
Matthew Hancock
The levy control framework specifically controls the amount of direct subsidy, but a whole series of changes needs to happen to make sure that our transmission system can keep up with the distribution of energy supply as well as the demand. That includes changes to interconnectors—in other words, getting more of them—and making sure that we have a smarter grid and distribution system. It is difficult at this stage to calculate the cost of those changes.
Mr Tim Yeo (South Suffolk) (Con)
14. Does my right hon. Friend agree that one very effective way to address the issues raised by intermittency from renewable generation is greater use of demand-side management, which is both cost-effective and environmentally attractive? As we get more sophisticated in our use of demand response, the balance can be maintained even with intermittent peaks and troughs in generation.
Matthew Hancock
I pay tribute to the huge expertise of my parliamentary neighbour, who will step down from this House next week, in this area. He has reminded me of something I should have said in my previous answer, which is to include demand-side response as one of the many ways in which we need to help manage the transmission system with more renewables on the grid.
Mr Tim Yeo (South Suffolk) (Con)
A few minutes ago, my right hon. Friend the Minister of State gave a very helpful answer to a question about demand-side response. In support of the Government’s fully justified claim to be the “greenest Government ever”, which I congratulate them on achieving, may I press him a little further? Is he aware that some people in the demand-side management industry are worried about the way in which the capacity market auction operated just before Christmas, and will he undertake to look into exactly how it is working in good time before the next auction, with the aim of establishing a level playing field as between different types of demand?
Matthew Hancock
I met representatives of the demand-side response industry in the autumn. I can give a commitment that we will review the way in which the market operates before the next auction, which we expect to take place this autumn.
May I take this opportunity to pay tribute to the Secretary of State? Although we are members of different parties, we have worked extremely closely, and I think that he has been a terrific Secretary of State. His support for the nuclear industry has been revolutionary, not least in his own party; his support for market-based solutions to renewable subsidies has been first-rate; and his support for my right hon. Friend the Chancellor’s proposal for a Swansea bay tidal lagoon has been exemplary. It has been a pleasure to work with him, and I wish him all the best.
Oral Answers to Questions
Debate between Tim Yeo and Matt Hancock(9 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Tim Yeo (South Suffolk) (Con)
Does my right hon. Friend agree that maintaining high levels of generating capacity to meet peak demand, which may be for very short periods, imposes a cost on all consumers? Will he therefore undertake to look carefully at the capacity market mechanism next year to see whether a greater contribution can be made by demand-side response—the system under which consumers are incentivised to reduce their consumption at short notice during periods of peak demand?
The Minister of State, Department of Energy and Climate Change (Matthew Hancock)
Demand-side response currently accounts for around 1.8 GW of balancing services, and we expect it to rise to around 2.5 GW. I have met the demand-side response industry a couple of times, and we will ensure that we take into account its concerns as we review the operation of the capacity market, which was incredibly successful this December.