Question

To ask the Secretary of State for Energy and Climate Change, what recent steps she has taken to continue to ensure the security of the electricity supply in the UK.

The government takes security of supply very seriously. We have worked with National Grid and Ofgem to put an effective plan in place for this winter and we are already taking prudent steps to manage margins in winter 2016/17.

DECC officials have worked with National Grid and Ofgem on National Grid’s winter outlook process for 15/16 which has informed the procurement of the Contingency Balancing Reserve for this winter.

National Grid and Ofgem agree that Grid should retain the ability to procure the contingency balancing services for the next two winters and the Government supports this position. On 15 October, Ofgem commenced its consultation on the extension of the cost recovery arrangements for the contingency balancing services to allow National Grid’s contingency balancing services to continue for the winters prior to the introduction of the Capacity Market in 18/19. National Grid’s Tender for the Contingency Balancing Reserve (subject to the outcome of the Ofgem consultation) opened on 2 November.

The Capacity Market, a key part of our reform of the electricity market, will drive new investment in gas and demand side capacity in the future. The first Capacity Market auction was successfully concluded in December 2014 and the next will commence on 8December 2015. We have announced our intention to procure a total of 47.9GW capacity for the delivery year 2019/20 and that the target capacity for the auction this December will be 45.4GW. The balance (2.5 GW) will be procured in 2018, one year ahead of delivery.