Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, if he will make an assessment of the implications for his policy on the need for additional gas storage in the UK of the statement on 16 May 2014 of the EU Energy Commissioner that the gas security of supply directive should be amended to increase the mimimum quantity of gas that member states are obliged to store.
Answered by Michael Fallon
The Energy Commissioner's statement predates the EU Energy Security Strategy on 28 May 2014which sets out the position on this issue and is available at:
http://ec.europa.eu/energy/security_of_supply_en.htm.
The EU Energy Security Strategy does not call for additional gas storage, nor minimum quantities of gas, to be held in storage by Member Storage. Rather, it proposes ‘stress tests' to security of supply shocks which could include, if necessary, increasing gas stocks in Europe amongst other measures.
We will engage with any stress test process and consider the implications for our approach to gas security arising from the results. It also sets out a wide range of other measures, highlighting that storage is only one aspect of gas security.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, if he will make an assessment of the implications for his policy on the need for additional gas storage capacity in the UK of recent events involving Russia and Ukraine; and if he will make a statement.
Answered by Michael Fallon
We have no plans to reassess the need for additional gas storage capacity in the UK in the light of events between Russia and Ukraine. The Department commissioned from Redpoint Energy analysis on the case for Government support for additional gas storage in the UK, which was published in September 2013. This cost-benefit analysis did not support intervention to deliver additional gas storage capacity due to a combination of low risk, poor rates of return for the taxpayer, and the risk of unintended consequences within the market.
Disputes between Russia and Ukraine affecting gas supply to Europe do not change this stance. Previous analysis has demonstrated that the UK gas market is resilient to all but the most unlikely combination of high-demand conditions and supply disruption. The UK has a diverse range of gas suppliers and routes to market and receives less than 1% of its gas from Russia.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, what recent assessment he has made of the potential need for additional gas storage capacity in the UK; and if he will make a statement.
Answered by Michael Fallon
The Department commissioned independent analysis by Redpoint Energy on the case for intervention in the UK gas storage market.
This cost-benefit analysis did not support intervention to deliver additional gas storage capacity within the UK due to a combination of low risk, poor rates of return for the taxpayer, and the risk of unintended consequences within the market. A written statement to Parliament on gas security of supply policy and gas storage was made by my rt. Hon. Friend the Secretary of State on 4 September 2013.
The market continues to bring forward gas storage projects: two storage facilities have recently been completed and two more are currently under construction.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, what steps he is taking to reassess the need for additional gas storage capacity in the UK; and if he will make a statement.
Answered by Michael Fallon
We published on 3 September 2013 an independent assessment about the need to intervene in the gas storage market. With reference to my answer to written question 198546, we decided against intervention on the basis of the cost-benefit analysis undertaken by Redpoint Energy.
The factors which underpinned this decision have not changed. I have no plans to reassess the need for additional gas storage capacity within the UK.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, what assessment he has made of the impact on independent generators of introduction of Contract for Difference auctioning before the Offtaker of Last Resort is in place.
Answered by Michael Fallon
The OLR will support independent renewable generators by providing them with a guaranteed route to market and improving their ability to raise project finance.
My officials have worked closely with developers and other stakeholders in working up the Offtaker of Last Resort proposals. The policy design is already at an advanced stage, and the detail of the proposals has been recently consulted on. We are on track to deliver the final policy and introduce enabling regulations ahead of the first allocation of CfDs. CfD applicants will, therefore, have a high degree of clarity about the arrangements for OLR, well in advance of the first auctions.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, pursuant to the Answer of 3 April 2014, Official Report, column 805W, on renewable energy, what the standard period is for stakeholders to be given to respond to a Government consultation.
Answered by Michael Fallon
The amount of time required for stakeholders to respond to a Government consultation will depend on the nature and impact of the proposal and might typically vary between 2 and 12 weeks.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, if he will recconsider the proposal to introduce Contract for Difference auctioning three years earlier than planned.
Answered by Michael Fallon
We have always been clear that auctions can be used to drive value for money, once the market is sufficiently developed. As set out in the Consultation on Competitive Allocation, published by the Department on 16 January 2014, we consider that market conditions are such that for some, more established, technologies this will be the case from the start of the allocation of Contracts for Difference (CfDs) under the enduring arrangements.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, what assessment he has made of (a) the readiness of markets for a Contract for Difference (CfD) competitive bidding process and (b) the effect on independent generators of early introduction of CfD auctioning.
Answered by Michael Fallon
The Department launched a consultation on our approach to competitive allocation of Contracts for Difference (CfDs) in January 2014. This included proposals to move to auctioning of CfDs from the first allocation this autumn. We carefully considered the responses to the consultation before confirming our policy position in the Government Response published on 13 May 2014. Competitive allocation will deliver renewable energy at a lower cost for consumers.
In developing our proposals for the move to competitive allocation, my officials have also worked closely with developers and other stakeholders, including representatives of independent renewable energy generators.
In particular, we are introducing the Offtaker of Last Resort (OLR) to support independent renewable generators by guaranteeing a route-to-market and therefore improving their ability to raise project finance. The policy design is already at an advanced stage, and the detail of the proposals has been recently consulted on. We are on track to deliver the final policy and introduce enabling regulations ahead of the first allocation of CfDs. CfD applicants will, therefore, have a high degree of clarity about the arrangements for OLR well in advance of the first auctions.
Asked by: Dan Byles (Conservative - North Warwickshire)
Question
To ask the Secretary of State for Energy and Climate Change, with reference to the Answer of 3 December 2012, Official Report, column 590W, on wind power, what progress he has made on addressing the issue of manufacturers selling turbines which have been derated to allow them to benefit from higher tariffs; and if he will make a statement.
Answered by Michael Fallon
DECC takes the issue of turbine de-rating under the Feed-in Tariff scheme (FITs) seriously.
To the end of September 2013, 110 turbines had been installed under the Feed-in Tariff scheme (FITs) in the 100-500kW band, representing just 2.2% of wind sites. Of these 110, eight, with a total installed capacity between 490 -500kW, had been de-rated.