Asked by: Maria Miller (Conservative - Basingstoke)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Energy and Climate Change, what process her Department has for deciding whether (a) additional electricity generation is needed in a local area and (b) that generation should be centralised or decentralised
Answered by Andrea Leadsom
The Government does not determine where new generation should connect to the network; this is a commercial decision for individual developers. The Department has, however, introduced the Capacity Market, which is designed to incentivise both new generation investment and maximise the use of existing assets to ensure that Great Britain as a whole has a secure, affordable and clean energy supply. On 6 May, Government announced that it would buy more capacity, earlier, and bring forward the start of the Capacity Market delivery period by a year to 2017/18.
The network charging regimes (through the locational price zones at the high-voltage transmission network or connection charging regime at the lower voltage distribution network) provide price signals that encourage developers to connect where it is economically efficient to do so, helping to limit costs passed through to consumers. The charging regimes are designed by the network industry in line with the requirement to be cost-reflective, and are approved by Ofgem.
New generation connecting above 132kv will connect to the transmission network, whereas at that level and below, it will connect to the local distribution network. In Scotland, 132kv also forms part of the transmission network.