Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to the Answer of 1 March 2018 to question 128954, what assessment he has made of whether as a result of increased interconnection (a) net employment in the GB electricity generating sector will increase or decrease and (b) UK GDP contribution from the GB electricity generating sector will increase or decrease in real terms.
Answered by Claire Perry
New interconnectors create jobs and contribute to GDP in their construction and ongoing operation. However, we do not hold sufficiently disaggregated data on employment in and GDP contribution from the electricity sector to make a quantitative assessment of the impact of increased interconnection on these points.
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to the Answer of 1 March 2018 to Question 128954, what assessment he has made of the effect of increased electricity interconnection on (a) net employment in and (b) GDP contribution from the electricity generating sector.
Answered by Claire Perry
New interconnectors create jobs and contribute to GDP in their construction and ongoing operation. However, we do not hold sufficiently disaggregated data on employment in and GDP contribution from the electricity sector to make a quantitative assessment of the impact of increased interconnection on these points.
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether he has made an assessment of the effect of increased electricity interconnection on welfare.
Answered by Claire Perry
Ofgem considers interconnectors’ contribution to welfare as part of their assessment for regulatory approval.
The first round of projects that received regulatory approval from Ofgem showed GB consumer welfare benefits of up to £12 billion over their 25 year regulated lifetimes.
The second round of projects that received regulatory approval from Ofgem (GridLink, NeuConnect, and NorthConnect) showed GB consumer welfare benefits of over £7 billion over their lifetimes.
The full details of Ofgem’s assessments for these projects, and a small number of other projects which have been assessed separately, can be found at
https://www.ofgem.gov.uk/electricity/transmission-networks/electricity-interconnectors.
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether the UK is projected to become a net exporter of electricity by 2025.
Answered by Claire Perry
Projected figures show that we will not be a net exporter of electricity by 2025.
Projections for the power sector up to 2035 are published in the BEIS Energy and Emissions Projections 2017, which can be found here: https://www.gov.uk/government/publications/updated-energy-and-emissions-projections-2017. Beyond 2020, the reference scenario includes assumptions that go beyond current Government policy and should be treated as illustrative.
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent assessment his Department has made of the contribution to the economy of UK-based energy generation; and what recent estimate he has made of the number of jobs supported in the UK by that industry.
Answered by Claire Perry
As set out in table 1, the energy sector directly contributed 2.3% of GDP, or £40.2 billion, to the UK economy in 2016 and directly employed 178,000 people. Further jobs are supported indirectly, for example, an estimated 152,000 were employed in support of UK oil and gas extraction, while the ONS separately estimate that the low carbon electricity sector employed 40,500 in the supply chain.
Table 1: Contribution to GDP and direct employment of the UK energy sector in 2016
| Contribution to GDP | Employment |
Coal extraction | 0.002% | 1,936 |
Oil and gas extraction | 0.78% | 32,192 |
Refining | 0.08% | 3,887 |
Electricity | 1.03% | 87,277 |
Gas | 0.37% | 47,723 |
Nuclear fuel processing | 0.07% | 4,985 |
Total | 2.33% | 178,000 |
Source: Tables 1 and 2 of https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/631147/UK_Energy_in_Brief_2017_dataset.xls
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what information his Department holds on average policy costs per MWh in (a) the UK, (b) France, (c) Ireland, (d) Norway, (e) Germany and (f) the Netherlands.
Answered by Claire Perry
Eurostat collate data on the average gas and electricity prices paid by different sized domestic and non-domestic customers in Europe. [1] Table 1 below sets out the amount paid towards “environmental taxes and levies, and VAT” on the gas and electricity prices paid by medium-sized domestic customers. Data excluding VAT is not published.
Table 1: Environmental taxes and levies, and VAT on gas and electricity prices paid by medium-sized domestic customers, January – June 2017 (£/MWh)
| Gas | Electricity |
UK | 3 | 36 |
France | 14 | 52 |
Ireland | 10 | 40 |
Norway | Data unavailable | 41 |
Germany | 14 | 143 |
Netherlands | 35 | 36 |
Source: BEIS Quarterly Energy Prices, available online at https://www.gov.uk/government/collections/international-energy-price-comparisons. Data for Norway converted to £/MWh from Eurostat data available online at http://ec.europa.eu/eurostat/web/energy/data/database.
The data above focuses on the costs of policies. However, actions taken in the UK to tackle emissions have helped deliver savings on energy bills for households as energy efficiency savings have more than offset the cost of financial support provided for developing low-carbon technologies – delivering a net bill saving of £14 on average in 2016.
[1] Available online at: http://ec.europa.eu/eurostat/web/energy/data/database.
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what proportion of UK energy supply the Government estimates will be comprised of interconnected capacity by (a) 2020, (b) 2030 and (c) 2040.
Answered by Claire Perry
The proportion of electricity supplied by electricity imports in 2020 is expected to be 7.6%.
Projections for the power sector up to 2035 are published in the BEIS Energy and Emissions Projections 2017, which can be found here: https://www.gov.uk/government/publications/updated-energy-and-emissions-projections-2017
Up to 2020, the reference scenario reflects current power sector policies. Beyond 2020, the reference scenario includes assumptions that go beyond current Government policy. The results do not indicate a preferred outcome and should be treated as illustrative.
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps are being taken to assess the (a) short and (b) long-term effect on UK power generation of a growth in interconnection.
Answered by Claire Perry
The Government is committed to making sure consumers have secure, affordable and clean energy now and in the future, and the role of interconnection alongside other technologies in meeting this ambition in the short and long term was set out in our Clean Growth Strategy.
Part of this strategy is ensuring that different technologies compete against each other. For example, the Capacity Market is delivering secure supplies of electricity to homes and businesses through technology neutral auctions that result in a mix of reliable capacity. As part of this, interconnectors help deliver energy security while reducing costs for consumers through increased competition. This year’s auction, in which around 2GW of new interconnector capacity cleared, saw the lowest price yet in the history of the capacity market. We assess the outcome of every Capacity Market auction to see what it means for Great Britain’s future energy security.
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what information his Department holds on the average cost of transmission and other network charges per MWh in (a) the UK, (b) France, (c) Ireland, (d) Norway, (e) Germany and (f) the Netherlands.
Answered by Claire Perry
Eurostat collate data on the network charge component of electricity prices paid by different sized domestic and non-domestic customers in Europe[1]. For example, table 1 sets out the most recent available data on the amount paid on average by medium-sized domestic consumers towards network costs. This usage is consistent with the typical domestic consumption value used by Ofgem.
Table 1: Electricity network cost paid by medium-sized domestic customers, July – December 2016 (£/MWh)
| Electricity |
UK | 40 |
France | 42 |
Ireland | 55 |
Norway | 58 |
Germany | 56 |
Netherlands | 47 |
In considering any international comparisons, it should be noted that the individual components of network charges can vary by country.
[1] Available online at: http://ec.europa.eu/eurostat/web/energy/data/database
Asked by: David T C Davies (Conservative - Monmouth)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what the offshore wind capital expenditure data was for each of the last two years; and what the evidential basis is for his Department's assessment of the fall in the cost of wind power.
Answered by Lord Harrington of Watford
The Department does not hold data on capital expenditure for individual offshore wind projects. The Department’s latest projection of capital expenditure for generic offshore wind projects is published in Arup (2016): Review of Renewable Electricity Generation Cost and Technical Assumptions, and can be found here: https://www.gov.uk/government/publications/arup-2016-review-of-renewable-electricity-generation-cost-and-technical-assumptions.
The Contracts for Difference (CfD) Second Allocation Round results, which were announced on 11 September 2017, showed one offshore wind project commissioning in 2021/22 cleared at a strike price of £74.75/MWh (2012 prices) and two offshore wind projects commissioning in year 2022/23 cleared at a strike price of £57.50/MWh (2012 prices). Both these prices represent a saving on the administrative strike price set using the data from Arup (2016), indicating that offshore wind costs are falling.