Rt Hon Lord Lilley

    Mr Peter Lilley (Hitchin and Harpenden) (Con): What assessment he has made of the effect on (a) generating capacity and (b) the transmission network of an increased resilience on intermittent energy supplied by renewable sources.

    The Minister of State, Department of Energy and Climate Change (Matthew Hancock): Electricity generation always needs to balance supply and demand. The transmission system clearly has to change to accommodate expanding renewables, and Ofgem’s new framework will help that happen.

    Mr Lilley: I note that my right hon. Friend does not give any costs for the extra capacity required for when the wind does not blow or the sun does not shine and the extra transmission lines required to transmit from long distance. Will he confirm that those costs are not included in the £7.6 billion levy control framework, despite the fact that the former power director of the National Grid puts them at £5 billion a year? If they were included, the potential total cost of all the subsidies could be £500 per household per annum.

    Matthew Hancock: The levy control framework specifically controls the amount of direct subsidy, but a whole series of changes need to happen to make sure that our transmission system can keep up with the distribution of energy supply as well as the demand. That includes changes to interconnectors—in other words, getting more of them—and making sure that we have a smarter grid and distribution system. It is difficult at this stage to calculate the cost of those changes.