Monday 10 June 2019
Business, Energy and Industrial Strategy
Low-Carbon Generation: Smart Export Guarantee
I am pleased to announce I will be laying legislation today to introduce a new supplier-led subsidy free Smart Export Guarantee (SEG). This will ensure that homes and businesses, who export their surplus low carbon electricity to the grid, will be able to receive payment from their energy suppliers. The SEG will come into force in Great Britain from the end of December this year.
The UK has made substantial progress in building a successful renewables industry as part of our move to a low carbon economy. In 2017, businesses active in the low carbon and renewable energy economy generated £44.5 billion in turnover and employed an estimated 209,500 full-time equivalent employees. Our modern Industrial Strategy sets out how the Government will ensure that the UK continues to benefit from the transition to a low carbon economy.
Developments in technology and the industry, supported by the Government, have driven down the cost of small-scale low carbon electricity generation to a position where some projects can now be built without subsidy. This is in line with our vision that electricity generation should be competitive, and market based.
However, from responses in our call for evidence in July last year2, it was clear small-scale generators can struggle to access the electricity market, while some larger suppliers are unfamiliar with smaller players in the sector. Responses suggested that following the closure of the Feed in Tariffs Scheme (FITs), some form of Government intervention remains necessary while markets for small-scale low carbon generation are still emerging.
The SEG will address this by requiring licensed electricity suppliers to offer a tariff for electricity exported by small scale low carbon generators, such as households with solar panels. This means small scale generators will be able to fully participate in the UK electricity market. This new requirement will apply to suppliers with more than 150,000 domestic customers. Other smaller suppliers can also voluntarily participate in the SEG.
Other than a few core conditions, such as payments having to always be greater than zero, this policy is market-led. The rates paid to the small power producers will be determined by the market rather than set by Government. This is unlike the FITs, which was funded through levies on consumers’ energy bills.
The SEG will complement the deployment of smart, flexible technologies such as storage and demand- side response. A smart and flexible system could save £17-40 billion across the electricity system to 20503. The policy will encourage electricity to be sold at the times when it is most needed and market prices are highest.
Previously, the amount of electricity exported by small scale generators has often been unmeasured and flowed to the grid without metering. The rollout of smart meters allows a more precise approach, which in turn will make it easier to manage the electricity system as the number of small scale generators, as well as electric vehicles and small-scale storage batteries, increases.
Suppliers will also be free to choose the form of the tariff they offer and be encouraged to try different approaches, provided they meet the SEG requirements. This will allow simple tariff offers to be implemented quickly, with an expectation that increasingly smart approaches will be implemented.
The deadline for compliance will be from the end of the year to provide enough time for suppliers to make necessary system changes to operate the SEG. This will not preclude suppliers from offering export tariffs in advance of the deadline, as some are already doing.
To ensure that the market is delivering meaningful and innovative tariffs, Ofgem will report annually on the provisions made by suppliers for small-scale exporters. This will include the range, nature and uptake of SEG tariffs. If we consider that insufficient progress is being made, we will consult on reviewing the operation of SEG.
The SEG will ensure that small-scale low carbon generators are reimbursed for the electricity they export to the grid and can act as a springboard to the development of a robust and competitive market solutions. SEG allows the private sector to innovate and invest, while small-scale generation technologies can compete on their own merits. We expect that the electricity market to grow smarter and more flexible, and consumers will be offered an increasing range of innovative smart products and services. These services will support the integration and optimisation of onsite low carbon generation.
I will place in the Libraries of both Houses, copies of the “Government response to the consultation on proposals for the future development of small-scale low-carbon electricity generation” which sets out further information on the SEG.
1 Final results from the Low Carbon and Renewable Energy Survey on the low carbon and renewable energy economy in the UK, including direct and indirect activity, employees and turnover, available at:
2 The future for small-scale low-carbon generation: a call for evidence (July 2018) at: https://www.gov.uk/government/ consultations/the-future-for-small-scale-low-carbon-generation-a-call-for-evidence
3 https://assets.publishing.service.gov.uk/government/uploads/ system/uploads/attachment_data/file/568982/An_analysis_of_ electricity_flexibility_for_Great_Britain.pdf
Foreign and Commonwealth Office
Great Britain China Centre: Tailored Review
I am announcing today the publication of the recent tailored review of the Great Britain China Centre (GBCC), an arm’s-length body of the Foreign and Commonwealth Office (FCO).
The GBCC was established in 1974 and focuses on strengthening the UK-China relationship by “building trust and supporting dialogues between Government, judiciary and policy makers on key rule of law and reform issues”. Since 1974, it has played an important part in delivering UK expertise on democracy and democratic institutions.
The principal aims of tailored reviews are to ensure public bodies remain fit for purpose, are well governed and properly accountable for what they do.
In conducting this tailored review, officials engaged with stakeholders in the UK and overseas, including across UK Government, civil society, as well as with GBCC’s board, staff and management.
The review concluded in April 2019.
The review found that “GBCC continues to perform an important function in the UK-China relationship; makes a positive contribution to UK priorities in China; and represents good value for money for the taxpayer”. The review also contains a number of recommendations to strengthen GBCC’s governance and its relationship with the FCO.
Copies of the review will be placed in the Libraries of both Houses.
Immigration: DNA Evidence
Today I am announcing the publication of the Home Office response to Darra Singh’s review of the Home Office response to the mandating of DNA for immigration purposes. The Home Secretary commissioned this review to provide independent oversight of the effectiveness of remedial action taken by the Department when the incorrect mandating of DNA evidence came to light last year.
The review recognises the considerable efforts made by the Department, once the issue came to light, to assess the scale of the problem and prevent its recurrence, and to identify those affected and take remedial action, including reimbursing DNA testing costs where appropriate. The review acknowledges that good progress has been made to update guidance on DNA and to provide training on this issue.
While the review acknowledges the hard work behind the immediate response, it comments that the effective direction provided by the critical incident process could have been put in place at an earlier stage. The review also identifies areas where the Home Office’s approach to sampling, data collection, and assurance in this instance could have been improved.
The Department accepts the recommendations made in the report and has already taken action on them. Furthermore, beyond this specific issue the Department is focused on meeting the individual needs of the public we serve by improving customer service, ensuring we better protect the vulnerable and focusing on becoming more of a listening organisation.
I will arrange for copies of the report and Home Office response to be placed in the Libraries of both Houses.
The Home Secretary and I would like to thank Darra Singh for his considerable effort in producing the report and its recommendations.
Work and Pensions
Employment, Social Policy, Health and Consumer Affairs Council
The Employment, Social Policy, Health and Consumer Affairs Council will take place on 13th June 2019 in Luxembourg. Kelly Tolhurst, Parliamentary Under-Secretary for the Department for Business, Energy and Industrial Strategy, will represent the UK.
The Council will be provided with a progress report on the directive on equal treatment. Conclusions will be presented to the Council for adoption on: Closing the gender pay gap; implications for the safety and health of workers in the changing world of work; and the EU Council Auditors' report on the Fund for European Aid to the Most Deprived (FEAD).
Under the agenda item on the European semester agenda item there will be a high level policy debate on the employment and social policy aspects of country specific recommendations.
Under other business, the presidency will give updates on current legislative proposals: a regulation on European social statistics and revision of the regulations on the co-ordination of social security systems. Information will also be provided on presidency conferences, gender balance on company boards and the work programme of the incoming Finnish presidency. The Maltese delegation will provide additional information on the outcome of the EU-Arab high-level meeting on disability rights and prioritising gender budgeting in the future multiannual financial framework.
In the margins of the meeting, representatives of the Government of each member state will make a decision on which member state will host the European Labour Authority.