Asked by: Hannah Bardell (Scottish National Party - Livingston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will review the incentives for businesses to use distributed energy solutions.
Answered by Claire Perry
We are considering options for small-scale low carbon generation beyond 2019, and a consultation on the Feed-in Tariffs scheme will be published in due course. Ofgem’s current Targeted Charging Review (link: https://www.ofgem.gov.uk/publications-and-updates/targeted-charging-review-consultation) is considering some aspects of network charging and the incentives it places on network users, including distributed energy.
Asked by: Hannah Bardell (Scottish National Party - Livingston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment his Department has made on potential effect of the Government's proposed energy price cap on investment in the energy sector.
Answered by Claire Perry
The draft Domestic Gas and Electricity (Tariff Cap) Bill is clear that Ofgem must have regard to the need to ensure that holders of supply licences who operate efficiently are able to finance activities authorised by the licence. It would be for the independent regulator, Ofgem, to make its assessment of efficient operations. Ofgem is not required to have regard to investment projects that are outside the scope of the activities authorised by the supply licence.
Asked by: Hannah Bardell (Scottish National Party - Livingston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what business model his Department will use in determining the level of the proposed energy price cap.
Answered by Claire Perry
The draft Bill would require Ofgem to set the level of the price cap such that, amongst other things, it would maintain incentives for switching and enable effective competition.
Asked by: Hannah Bardell (Scottish National Party - Livingston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will publish details of the business model his Department used to determine the pre-payment meter energy price cap.
Answered by Claire Perry
The prepayment safeguard (price cap) tariff was introduced by the Competition and Markets Authority (CMA) following its investigation into the energy markets. The methodology set by the CMA, and administered by Ofgem, to calculate the cap was brought into effect by the CMA’s Energy Market Investigation (Prepayment Charge Restriction) Order 2016, which is available on the CMA’s website here, https://www.gov.uk/government/publications/energy-market-investigation-prepayment-charge-restriction-order-2016
Asked by: Hannah Bardell (Scottish National Party - Livingston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what representations his Department has received from businesses on the effect on investment of the proposed removal of appeals from the Domestic Gas and Electricity (Tariff Cap) Bill to an expert body.
Answered by Claire Perry
The Department for Business, Energy and Industrial Strategy receives many representations from businesses on a range of issues.
The draft Bill would place a new duty on Ofgem to implement a cap on standard variable and default tariffs, so it does not remove an existing right of appeal. Energy companies would be able to challenge Ofgem’s decision on the setting of the cap by way of judicial review.
The draft Bill is clear that Ofgem must have regard to the need to ensure that holders of supply licences who operate efficiently are able to finance activities, including carrying out investment authorised by the licence.
Asked by: Hannah Bardell (Scottish National Party - Livingston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether his department has made an assessment of the potential effect of banning standard variable tariffs on (a) customer engagement (b) switching rates and (c) reducing the differentials between the highest and lowest tariffs.
Answered by Claire Perry
Imposing an absolute price cap on domestic standard variable and default tariffs with limited exemptions will ensure customers on these tariffs do not pay unjustifiably high prices. Banning these tariffs would not provide assurance that they would not simply be replaced with an alternative default tariff that had little impact on customer engagement, switching rates or differentials between highest and lowest tariffs.
Reducing the differentials between the highest and lowest tariffs could result in suppliers removing their cheapest tariffs but maintaining high priced standard variable tariffs. This was also the view of the BEIS Select Committee in their report on the draft Bill.
Asked by: Hannah Bardell (Scottish National Party - Livingston)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment his Department has made of the potential effect on the Government's proposed energy price cap on the smart meter roll-out.
Answered by Claire Perry
The draft Domestic Gas and Electricity (Tariff Cap) Bill is clear that Ofgem must take into account an efficient supplier’s ability to finance its activities. This would include the roll out of smart meters, which is a requirement of their supply licence.