Electricity System Resilience (S&T Committee Report) — House of Lords, 2015-11-03
Topic: Energy
Robin Teverson (Liberal Democrats, Centre to centre-left): My Lords, I am not a member of the committee but I am pleased to take part in the debate about this important subject. I would say one thing about the logic of the noble Viscount, Lord Ridley, on wind-power renewables not reducing carbon. He said that it was because there has to be an equal amount of back-up, but that logic does not work. Even if you need that amount of back-up, if it is not operating then it is not producing carbon. I do not understand the logic there. With the existing regime, even without renewables, the utilisation of generating capacity is, on average, about 50%. It is estimated by National Grid—these are not my figures—that intermittency with renewables becomes a real problem only when they are at about 20% of total generation, so I am not sure whether all that really adds up. However, I agree with the noble Viscount that we should absolutely be taking out coal. I am glad that he agrees with these Benches on that. We should also be getting on and substituting gas in the short term. He was absolutely right about that, too I want to concentrate on a couple of things in an excellent report, which is a good reference and has a number of important issues in it. I particularly like the space it gives to the demand side. As the noble Earl said so well, energy efficiency effectively solves the energy trilemma. It helps security, brings down bill costs—even if not necessarily the unit price—and decarbonises the economy. There has always been frustration for all Governments in how to turn that benefit and make that leap, without causing all sorts of unaffordably large public expenditure. Unfortunately, the Green Deal was not very successful in the coalition Government period. It is unfortunate that it seems to have disappeared altogether rather than being improved, which is what was needed. I hope we can move forward in some way in that area Demand reduction is key and the UK economy has been quite good at that in recent years, increasing energy efficiency by some 2% or 3% per annum, but the other part of demand is demand-side management. Again, the report tackles that subject, which has been very unfashionable. It has often been forgotten about and is only starting to be considered. In that context, the report specifically mentions capacity payments, which are particularly important. What has effectively happened is that the aggregation of demand-side management, which should really be competing with generation under the capacity payment, has been discriminated against. I remember from the coalition Government years that there were all sorts of issues in DECC about getting the two to compete properly that were legally quite difficult. I do not know but it certainly seems that it should be a priority of government to make sure that demand-side aggregation and management plays an equal part to that of capacity in the capacity mechanism The noble Earl was also right to say that most of the existing capacity mechanism has brought in fossil fuels, which is unfortunate. But demand-side management aggregation on the capacity mechanism would make absolutely sure that we do not build extra capacity. We actually need less and should solve it in that way, by taking out the peaks I also wanted specifically to mention interconnectors, which is an important area but has been relatively sleepy over the past few years. DECC may have got involved in this again in the last couple of years, so we now have interconnectors with Ireland, the Netherlands and France. We have opportunities, perhaps, for geothermal to come in from Iceland; that may be rather a big ask but I know we have a memorandum of understanding with the Icelandic Government. I would be interested to hear from the Minister where interconnector policy is going. That would not only seem to take out the peaks but has export potential for us as well. We should very much welcome it My last point on this excellent report concerns storage. As renewables grow and intermittency becomes a problem, energy storage will be part of the solution. There seems to be a frustratingly slow evolution of efficiency in energy storage. We have run out of capacity in dams and water, and all that side of energy storage. The Tesla corporation seems to be making good progress in the commercial field but I would be interested to hear from the Minister what investment the Government are stimulating in R&D at present. There is clearly a worldwide demand for this, especially in the UK. I commend the report fully and look forward to the Minister’s reply.