Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Energy and Climate Change, what assessment her Department has made of the effect of the expansion of new electricity interconnectors on (a) the capacity market auction price and (b) long-term investment in gas-fired electricity generation.

We are confident that the Capacity Market is the right tool to bring forward new capacity including gas as it is needed. The participation of interconnectors in the Capacity Auction is expected to increase competition among capacity providers in the auction helping to take clearing prices as low as possible for consumers. The security of supply contribution that interconnection makes is assessed annually, based on detailed market modelling to determine anticipated electricity flows from connected markets at times of GB system stress. The government published an impact assessment last year on the inclusion of interconnectors in the Capacity Market which is available here:

http://www.legislation.gov.uk/ukia/2015/187/pdfs/ukia_20150187_en.pdf.

Both new gas and new interconnectors are likely to be important parts of the long-term investment we need in new capacity to ensure energy supply.