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Capacity Mechanism

Volume 555: debated on Thursday 13 December 2012

14. What steps he is taking to ensure that the forthcoming capacity mechanism is not unduly biased towards large, centralised, fossil fuel generation. (133332)

The capacity market is intended to ensure that we have adequate reliable capacity on the electricity system. It will be open to all reliable providers of capacity, including large centralised generation and other forms such as demand-side response, storage, and combined heat and power. We are putting in place tailored arrangements accordingly.

Does the Minister not share my worry and concern that, in the context of the Energy Bill and every other measure, it does not matter that we have been told this morning that we have unanimity across the two Government parties, because there is no unanimity with the Chancellor? What he said in his autumn statement and what he said this week means that it is all about gas, gas, gas. I am in favour of shale; indeed, today’s Question Time has been destroyed by not having a proper announcement on and scrutiny of shale. The fact is that we now have a Government determined to go for gas with no balance in the energy economy at all.

As the hon. Gentleman knows, the intermittence of renewables and the relative inflexibility of other forms of generation mean that gas is necessary to provide flexibility. However, he is absolutely right that if we are going to make an argument for a mixed economy, because that provides the best chance of sustainability, we cannot put all our eggs in one basket. The Energy Bill, together with the levy control framework —which, as he also knows, provides £7.6 billion for renewables, carbon capture and storage, and nuclear—enables us to achieve just that mix.