Rt Hon Lord Lilley

    1. Mr Tim Yeo (South Suffolk) (Con): What assessment he has made of the security of the UK’s energy supply. [905173]

    5. Nic Dakin (Scunthorpe) (Lab): What steps he is taking to increase the UK’s energy security. [905177]

    6. Stephen Mosley (City of Chester) (Con): What assessment he has made of the security of the UK’s energy supply. [905178]

    13. Joan Walley (Stoke-on-Trent North) (Lab): What steps he is taking to increase the UK’s energy security. [905189]

    The Secretary of State for Energy and Climate Change (Mr Edward Davey): We have taken a number of measures to ensure the security of the UK’s energy supply, including introducing new electricity system balancing measures. Our recent national gas risk assessment demonstrated that our gas infrastructure is resilient. In the autumn, I will publish the statutory security of supply report for 2014, which will provide a further assessment of our energy security, and set out my response to the Office of Gas and Electricity Markets’ recent electricity capacity report. We have also engaged closely with EU and G7 partners on measures to increase the EU’s energy security.

    Mr Yeo: Does my right hon. Friend agree that one of the most cost-effective as well as greenest ways to address concerns about security is through greater use of demand-side response, which has been successfully deployed at scale in the United States? Will he undertake to ensure that the treatment of demand-side response providers in the forthcoming capacity market and the transitional arrangements is no less favourable than those available to electricity generators?

    Mr Davey: I am pleased at the way in which our demand-side measures have been advancing. They are something on which I have placed a lot of stress. I know that my Minister of State appeared before my hon. Friend’s Committee when it was investigating this matter. We certainly want to ensure that we move forward on this and that there is nothing in the way of taking up more demand-side measures.

    Nic Dakin: Last month, EDF announced that it was temporarily closing four of its nuclear reactors, reducing the UK’s nuclear capacity by a quarter. With most of the nuclear fleet being decommissioned by 2023, what steps is the Secretary of State taking to ensure maximum use of those assets before that date?

    Mr Davey: With regards to the two nuclear plants involved, Heysham and Hartlepool, we are taking only precautionary measures to ensure that proper safety and security measures are examined, and I am sure that the whole House will agree that that is the right step. The impact that that will have on our margins over the winter has already been taken account of in National Grid’s analysis and procurement plans. On the hon. Gentleman’s longer point, the whole energy strategy is designed to ensure that we have the capacity that we need not just for the short and medium term but for the long term. I refer him to the investment report that we published in July, which shows a fantastic record of investment in energy across the piece. Indeed, there have been record levels of investment in energy, especially in low-carbon energy.

    Stephen Mosley: What action are the Government taking to ensure that gas supplies keep flowing this winter should Russian gas stop flowing to the EU?

    Mr Davey: I thank my hon. Friend for his question. The UK imports very little gas from Russia. We have the most liquid and resilient gas markets in the whole of the European Union, but of course we are not complacent. We have been working at the EU to ensure not only that we check resilience of our gas supplies but that our EU colleagues are able to ensure their energy security. This is an EU measure which is very important for the whole of the European Union.

    Joan Walley: One of the best things that the Secretary of State can do for continued investment is to bring forward the 2030 decarbonisation target to give long-term certainty to investors.

    There is a particular issue with regard to gas and gas storage, which is impacting on ceramic manufacturers. Now that we have a new Minister, who is at the Department of Energy and Climate Change and at the Department for Business, Innovation and Skills, and National Grid has announced that it has brought forward the supplemental balancing reserve tender, which will put even greater pressure on energy suppliers and security this winter, it is absolutely essential that the Secretary of State reconsiders his Department’s stance on gas storage. We urgently need a change of policy on extra gas storage.

    Mr Davey: The hon. Lady knows that we legislated to introduce a decarbonisation target for 2030 in the Energy Act 2013. She also knows that my party strongly supported that.

    We looked at gas storage in huge detail to see whether there was a case for Government intervention, but we found that an awful lot of gas storage was being built with more modern technology, which means that the gas can be produced and brought into the pipeline network much more quickly. We have looked at that matter in detail and we do not intend to review it.

    17. [905195]Mr Peter Lilley (Hitchin and Harpenden) (Con): Does my right hon. Friend agree that the problems we are facing illustrate that, despite huge investment, wind and other renewables cannot replace conventional fuels and require additional capacity megawatt for megawatt to meet need when the wind does not blow or the sun does not shine? Will he confirm that the Government’s costings for renewables do not take into account the cost of supplying an additional amount of conventional capacity?

    Mr Davey: We need a mixed approach to energy supply and generation. The Government have always argued that we need renewables, gas and new nuclear and that diversity gives a country extra strength in its security of supply. When we do our analysis we consider all the system costs, not just of renewables but of nuclear and other systems, and no type of electricity generation is without its challenges. For example, in the short term, we have seen fires at two coal plants, Ironbridge and Ferrybridge, that we are having to take into account in our analysis to ensure that our capacity margins are okay over the winter. The mixed approach that we propose is the most secure.

    Caroline Flint (Don Valley) (Lab): The future of Thoresby and Kellingley coal mines has now been in limbo for more than five months, which raises concerns about energy security. Both the Business Secretary and the previous Energy Minister, the right hon. Member for Sevenoaks (Michael Fallon), said that they were not open to supporting or providing state aid, but the new Minister of State has indicated in meetings that he may be open to state aid, so will the Secretary of State clear up once and for all whether the Government will consider providing it?

    Mr Davey: Important though the issue is, it is not an issue of energy security. Even if those collieries were in any way to be suspended, the energy security of the country would be okay. The Government have worked tirelessly with the different companies involved to do what we can to help them reach a deal that will ensure the future of those pits, and we will continue to do just that.

    Caroline Flint: It really is important that we have clarity about the future of these mines. It helps no one—not UK Coal, not other potential investors and not the work force and their representatives—for this uncertainty to continue. The Business Secretary and the previous Energy Minister indicated that they were not open to providing state aid, whereas the new Minister has indicated that he may be open to state aid, so will the Secretary of State clarify? Will the Government not support state aid or have they changed their mind?

    Mr Davey: We consider all options, but the right hon. Lady presents state aid as a “get out of jail free” option when it is not. If the European Commission were presented with the state aid case, it is extremely likely that by the end of the support it would require the collieries to close. We think that there is an advantage in a commercial approach and that is what our attention is focused on.