Electricity — House of Commons, 2020-06-15
Topic: Energy
Alan Brown (Scottish National Party, Centre-left): The Minister is keen to keep reiterating that the capacity market is integral to the security of supply and that these regulations allow the capacity market to continue to operate, thereby providing that security. That is fine and I agree with that sentiment, but I think that also means that there is a reluctance to look at the wider issues. If we are talking about the security of energy supply and how important the capacity market is, there is an argument that we should look at some of the bigger pictures I welcome the fact that the changes result in compliance with state aid and allow the capacity market to function. On another positive, I welcome the move to reduce the minimum capacity threshold in the capacity market from 2 MW to 1 MW. The chief executive of the UK’s REA—the Association for Renewable Energy and Clean Technology—stated that this will "make it easier for cutting-edge clean technologies to compete." That endorsement is clearly very positive. However, will the Minister explain what measures are in place to ensure that we do not get more diesel generators bidding into the capacity market with the lowering of the threshold? What we want is more reliable renewable energy Has an assessment been undertaken as to whether grid pinch points could cause any restrictions for these potential newer forms of renewable generation, particularly in Scotland? That is also critical, given that these regulations allow for multi-year contracts, in terms of the demand-side response. We need to make sure that there are no pinch points preventing new renewables coming on-stream Paragraph 7.3 of the explanatory memorandum details changes from the regulations with respect to capacity market units not getting paid by simply not charging batteries. In terms of managing demand, does the Minister think that it is acceptable that EDF was recently paid a reported £50 million to halve output from Sizewell B for four months? Surely there is a better way to manage long periods of low demand for energy. Has he assessed how fit for purpose the energy market is for future pandemics or long periods of low demand? It is not just about security of supply at the upper end—we need it at the lower end as well On the bigger picture, what is the Minister doing to facilitate the co-location of large-scale storage alongside renewable energy sources such as offshore wind? This and the removal of the capacity cap in contracts for difference options would complement the capacity market. That needs to be reviewed as well. I stress that pumped hydro-storage is a perfect way to manage fluctuations in high and low demand and thereby provide security of supply. When are the Government going to assist in a route to market for the big projects that are in the pipeline in Scotland? Pumped hydro-storage is much more effective than nuclear and it is much more cost-effective, so we need to forget the white elephant of nuclear and in particular the desire to get small modular reactors up and running I turn back to the demand-side response, which, as outlined, is an accepted use within the capacity market, and there are some changes in the regulations in this regard. What assessment has the Minister made in the reduction of overall energy demand if the Government set and implemented a proper energy efficiency programme to ensure that all properties achieve energy performance rating C by 2030? Does he accept the research findings of the UK’s energy research institute, which said that this could reduce energy demand by 25%? That 25% reduction in demand is the equivalent of six Hinkley Point C stations, so why, again, is there the obsession with nuclear? A reduction in demand would make a massive difference and minimise the need for the over-reliance on the capacity market to keep the security of supply On energy efficiency and reducing demand overall, the Committee on Climate Change stated that the UK Government should match the ambitions of Scotland, and the Business, Energy and Industrial Strategy Committee reports that as well, so energy efficiency is critical to lower demand.