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Energy Market (New Entrants)

Volume 552: debated on Thursday 1 November 2012

Wider participation is key to a competitive market and to securing the investment we need. The forthcoming energy Bill will reform the electricity market to incentivise new investment in a diverse, low-carbon energy mix.

In a few weeks’ time I will have the pleasure of opening the new offices of First Utility in my constituency. It is one of the fastest growing energy companies in the country and a major local employer. It is pioneering new ways to help make household bills cheaper through a range of technologies and is an excellent example of the innovation that new entrants to the energy market can bring. Will the Minister meet me and First Utility to discuss how we can support new entrants into the energy market and boost competition to make household bills cheaper?

Just this morning I had a meeting with my diary secretary in which I prioritised just such a visit. It is vital that we allow new entrants into the market, because that will create the competitive pressure to drive down prices. The right hon. Member for Don Valley (Caroline Flint) told the House only last week that that had not happened over the past 15 years, and who was in charge of energy policy then?

The Minister will be aware that power purchase agreements are extremely important for the ability of independent low carbon generators to enter the market. Does he share my concern about the fact that power purchase agreements are disappearing from the market and that they will probably totally disappear by 2017? Does that not point to a concentration of generator ownership rather than the ability of low carbon generators to enter the market?

The Energy and Climate Change Committee, of which the hon. Gentleman is a member, is concerned about that point. We have called for evidence on exactly that subject, too—and for precisely the reasons that lie behind his question. We want to know what the issues and barriers are.

The hon. Gentleman is right to say that a plural marketplace is essential if we are to create the competitive pressure that I have described. Entry to that marketplace is therefore a priority. Actually, I think that that view is shared across the House.