Here are the climate-related sections of speeches by MPs during the Commons debate Energy Market Design.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
A new design modernising Europe’s electricity markets will be key to ensuring that the EU’s ambitious decarbonisation efforts are conducted in the most efficient and cost-effective way. Europe clearly needs to do more to ensure the effective functioning of cross-border electricity markets that effectively integrate renewables and provide clear signals for investments while offering best value to consumers. As the Committee knows, in the UK we have already addressed those challenges through the electricity market reform and we stand ready to share that expertise with our European partners. For those reasons, I welcome the Commission’s consultative communication on energy market design.
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Andrea Leadsom
The hon. Gentleman is exactly right that storage will play a huge part in future. I certainly feel that not enough has been done at a time when power generation from renewables has been rising rapidly not only in the UK but throughout Europe and the world. Of course, that renewable generation has added stresses to the system because of its natural intermittency, so finding a way to bring down the costs of storage and exploring the different storage technologies is important for all of us throughout the world who aspire to decarbonise our energy systems.A particular advantage of greater focus on the electricity market design across Europe is that we will be able to share with our European neighbours the costs of the technology and of research and development. We will be able to co-operate and find the best and most cost-effective solution for all our consumers.
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Andrea Leadsom
Yes, I am entirely happy with that rate of progress. The hon. Gentleman is quite right to raise the issue of CfDs being made available to foreign generators. Of course, the key point for the British consumer is the evaluation of the contribution that offering a CfD to a non-British generator could make to our energy trilemma: decarbonisation; keeping the costs down: and keeping the lights on. We are considering two projects, but he is absolutely right that we will not be making decisions for the next year or two. The two projects are with the Isle of Man and Iceland. The Isle of Man has shallow waters and the appetite to build an offshore wind project, which it would then seek an export market for, and of course that could be very advantageous to the British consumer, because it could be very cheap energy to produce, so it could be good value for the consumer here. Likewise, a project with Iceland could offer us access to geothermal energy sources, which could be very advantageous for the UK. All those projects require quite a lot of evaluation, but I can assure the hon. Gentleman that we will look at them carefully, based on whether they offer best value to consumers.
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James Heappey (Wells) (Con)
Last week, the Energy and Climate Change Committee went to the national grid headquarters in Wokingham, where the energy coming in from the continent is clearly displayed on its “flows” board. One became aware of the differences in the wholesale price between that in the UK and that elsewhere. As we build more interconnectors, I would be interested to know the Minister’s views on that: obviously, it will bring down the domestic wholesale price, but what will be the impact on existing CfDs and therefore on the Government’s financial exposure?
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Philip Boswell
Following on from that, I understand that stopping wind and solar was one option, but was not another option to slow them down to retain the supply chain? Creating a supply chain from nothing, as we look to move into tidal, wave and other forms of renewable energy, is extremely difficult. Continuing with wind and solar, although they might have slowed down, may have given us a greater advantage, putting Britain at the forefront of renewable energy and maintaining the advantage we had gained. Was it perhaps unwise to stop entirely?
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The Chair
That the Committee takes note of European Union Document No. 11018/15 and Addendum, a Commission Communication: launching the public consultation process on a new energy market design; and supports the Government’s approach of welcoming the Commission’s consultation which addresses the challenges that decarbonisation creates for Member States’ electricity systems and the effective functioning of the internal energy market, while working to ensure that any future legislative proposals preserve an appropriate balance of competence between the Member States and the Commission.— (Andrea Leadsom.)
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Dr Whitehead
In a context where we already collaborate to an extent with the EU in various energy matters, reductions in, or the removal of, subsidies for onshore wind and solar are being defended on the basis that we have already reached the expected deployment of renewable sources of electricity generating capacity. I assume that the Minister at least bows in the direction of the idea that we have a joint EU target on renewables, and that energy as a whole should include a joint target for renewables. Indeed, the UK’s renewable energy target is 15% of energy by 2020, as part of an EU-wide agreement.
Perhaps that is no more than a straw in the wind—an indication of the problems that the UK may encounter in making its position compatible with the EU’s, as we move on to greater integration of markets. I remind the Committee that for Paris COP 21 we have a joint position with the EU on the European contribution to carbon reduction and climate change targets; I would also point out the extent to which we are negotiating on those targets in Paris as one body. That will ensure that the member states can join in a real contribution to the joint targets agreed across the EU.
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Andrea Leadsom
I am pleased that we have had a good, constructive debate on the important subject of electricity market design. Now is the right time to review European energy market design. As Europe continues to make progress towards its decarbonisation objectives, it is important to ensure that they are achieved without placing at risk the effective and efficient functioning of the single market in energy.
The hon. Member for Southampton, Test talked about the EU decarbonisation targets. The Climate Change Act 2008 provides a stronger decarbonisation challenge than the EU targets and I assure him that we are looking at what we can do on heat and transport to ensure that we meet those challenges. I take his point that we could do more on electricity generation, but he would agree that it is also essential that we keep an eye on the cost to consumers. We cannot simply worsen fuel poverty and make our businesses uncompetitive, which we would if we increased, with no limits, cost to consumers through their energy bills.
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Andrea Leadsom
That the Committee takes note of European Union Document No. 11018/15 and Addendum, a Commission Communication: launching the public consultation process on a new energy market design; and supports the Government’s approach of welcoming the Commission’s consultation which addresses the challenges that decarbonisation creates for Member States’ electricity systems and the effective functioning of the internal energy market, while working to ensure that any future legislative proposals preserve an appropriate balance of competence between the Member States and the Commission.— (Andrea Leadsom.)
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