Oral Answers to Questions

Debate between Ed Davey and Laura Sandys

Thursday 27th February 2014 Commons Chamber

[Mr Davey]

The hon. Lady is right to say that there are issues, because the previous Government created the big six. We have acted from day one to put pressure on them.

On the hon. Lady’s last point about selling into a pool, let me explain the Labour party’s policy, because it is already out of date. Because of measures that we and Ofgem have taken, next-day trading has increased dramatically to more than 50% of electricity. That is equivalent to a pool. From talking to independent generators competing with the big six, we know that they are not interested in increasing that more; they are interested in forward markets, because that provides greater liquidity to enable them to compete. That is what Ofgem announced this week. I am afraid that Labour, as always, is completely behind the curve.

[Laura Sandys (South Thanet) (Con)]

On reducing energy prices further, Ofgem estimates that about £1 billion could be saved by reducing peak energy. What sort of strategies of demand-side response are the Government looking at?

[Mr Davey]

My hon. Friend is absolutely right to raise that issue, because there are some really cost-effective and good wins to be had. That is why we introduced the electricity demand reduction strategy in the Energy Act 2013. We will have a pilot—we expect it to go forward later this year—which will be the first ever electricity demand reduction project in this country.