Rt Hon Lord Lilley

    Peter Lilley (Hitchin and Harpenden, Conservative):

    To ask the Secretary of State for Energy and Climate Change, whether the forthcoming capacity auctions in December 2014 will seek to procure capacity suitable for providing balancing supply to match short-term fluctuations in the balance between demand and non-despatchable supply.

    Matthew Hancock (Minister of State for Portsmouth; West Suffolk, Conservative):

    The forthcoming capacity auction will secure 48.6GW of capacity, securing around 80% of the capacity we need four years in advance, to ensure high levels of security of supply, with the rest being secured from an auction one year ahead of delivery and support through other measures.

    The auction is technology neutral and is open to generators (new and existing plants) and demand side response providers. Those successful in the auction will be required to generate electricity, or reduce demand, at times of system stress or face financial penalties.

    It is National Grid’s responsibility to procure enough operating reserve as might be required for the real-time balancing of the system, which is a vital part of ensuring security of electricity supply. The Capacity Market will operate alongside the energy market, which is being further improved by Ofgem to incentivise providers to provide capacity in response to short-term fluctuations in supply and demand.