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Energy Supply Market

Volume 599: debated on Thursday 17 September 2015

There are 31 companies supplying households in Great Britain, providing greater competition —that is an increase from the 13 in 2010.

Labour’s price freeze plan discouraged the cost of capital and investor decisions in the competition marketplace. What steps will my right hon. Friend take to encourage smaller entrants into the marketplace, in order to make up the £30 billion or so shortfall between what we need to spend and what is planned to be spent on our pipes and our pylons in the next 10 years?

My hon. Friend raises the important issue of electricity transmission, and I intend to publish proposals later this year to enable the competitive tendering of certain onshore electricity transmission assets. Initial estimates show that these competitions could bring savings of at least £380 million in the first 10 years.

What assurances can my right hon. Friend give community trusts such as that spun off from Transition Belper, in my constituency, that they can continue being supported in their pre-accreditation bid towards the use of hydro power, which has been four years in production?

I know that my hon. Friend has taken a particular interest in community energy. I acknowledge that this change could make it more difficult for community energy projects to deploy, but we had to remove pre-accreditation as a matter of urgency, in order to safeguard spends under the scheme while we carry out the feed-in tariff review. But as part of the review, we are seeking views on whether the scheme should be focused towards specific groups or sectors, which might, for example, include households or communities.

My constituency is one of the coldest in England—it might not be as cold as parts of Scotland—so energy prices make up a significant part of the household budget there. I hope that my right hon. Friend shares my belief that increased competition will help to keep prices down and make energy much more affordable for constituents in High Peak and those across the country.

I share my hon. Friend’s views; keeping bills down is a key priority for this Government, and competition is absolutely one of the ways to achieve that. An unprecedented number of companies have entered the supply market since 2010, challenging the big six and providing customers with more choice. We expect that trend to continue, enhancing competition and keeping bills down.

I welcome the Minister’s replies, but solar energy companies are having to reconsider their business plans in the light of Government decisions to eliminate subsidies to the sector. That is creating difficulties for solar companies in my Lewes constituency. What steps is she taking to ensure that all energy companies compete on a level playing field?

I thank my hon. Friend for her question, and I know she has a particular interest in solar companies in her constituency, having brought them to my attention before. The sector has, of course, been a great success and has deployed at significantly higher volumes than we anticipated when the subsidy schemes were set up. That is why we are looking again at the right level of subsidy, to ensure that we continue to have a thriving solar industry while ensuring that the bill payer is not disadvantaged.

I welcome my hon. Friend the Member for Wigan (Lisa Nandy) to the Front Bench and wish her all the best. I thank her for her kind words, as I thank other colleagues across the House for theirs.

Of course competition should put downward pressure on prices. I have discovered, through a freedom of information request, that despite a tough letter from the Secretary of State demanding price cuts for energy companies in May because of low wholesale costs, responses have not been received from Centrica, RWE npower, E.ON and EDF. The Competition and Markets Authority interim report made it clear that the 70% of customers on their suppliers’ standard variable tariff are being overcharged and it recommended a better deal. Will the Secretary of State therefore join me in calling for the introduction of a protected tariff—a default tariff, as it is known—to make the energy market more competitive and give a fair deal to the consumers who are being ripped off?

I thank the right hon. Lady for joining me in making sure that consumers and bills are a priority. The CMA has recently reported—sadly, the Opposition opposed that reference at the time—and we are very interested in what it has proposed. It is just a report at the moment, but the principle of a safety tariff is a very interesting way of approaching the matter. I do feel that we need to take more action to support the vulnerable customers who are not making the switch and are missing out on those opportunities.