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Energy Demand

Volume 552: debated on Thursday 1 November 2012

5. What recent assessment he has made of the role of reduction in demand in ensuring the UK’s security of energy supply in the long term. (126041)

Following a recommendation from the Select Committee, I will shortly be publishing the Government’s energy security strategy. It will set out the Government’s framework for considering and addressing energy security, including the contribution of reduced demand. Building on that, the strategy will set the long-term direction for increasing energy efficiency, and the electricity demand reduction consultation proposes policies to unlock potential for further electricity efficiency. All three documents will be published later this year.

Will my right hon. Friend outline the balance of the investment required for the building of new energy generation capacity and for measures to reduce consumption?

The key purpose of electricity market reform is to allow the market to make decisions of that sort. As the hon. Gentleman will know, my Ministers and I are extremely supportive of demand reduction and energy efficiency measures, which have a critical role to play in our energy mix, but we also need to bring in new supply. We face rising electricity demand as we electrify the transport and heating sectors in the years ahead to meet our climate change targets, even if we have the most ambitious energy efficiency policies imaginable, so we need both a supply-side and a demand-side response.

Does the Secretary of State agree that although demand reduction is essential, demand balancing must also receive a bit more attention, and intelligent smart meters in homes would make an important contribution to that?

My hon. Friend is absolutely right. Sometimes in energy debates people think there is one particular solution or technology. The truth is we need a diverse-mix balanced approach on both the demand and the supply sides, and new technologies such as smart grids and smart meters have an important role to play.