Energy Focus

Volume 33 Number 2 SNP Energy policy – Callum McCaig MP July 2016 The abolition of DECC – Statement from Angus MacNeil The new department – Department for Business Energy and Industrial Strategy ENERGY FOCUS

Didcot DECC demolished DBEIS rises from the ashes

This is not an ofﬁcial publication of the House of Commons or the House of Lords. It has not been approved by either House or its committees. All-Party Parliamentary Groups are informal groups of Members of both Houses with a common interest in particular issues. The views expressed in Energy Focus are those of the individual organisations and contributors and do not necessarily represent the views held by the All-Party Parliamentary Group for Energy Studies. The journal of The All-Party Parliamentary Group for Energy Studies Established in 1980, the Parliamentary Group for Energy Studies remains the only All-Party Parliamentary Group representing the entire energy industry. We champion cross-sector energy research and development. The Group’s membership is comprised of over 100 parliamentarians, 100 associate bodies from the private, public and CHAIRMAN’S charity sectors and a range of individual members.

Published three times a year, Energy Focus records the Group’s activities, tracks key energy and environmental developments through parliament, presents articles from leading industry contributors and provides insight into the views and interests of both parliamentarians and ofﬁcials. FOREWORD Executive Council

Disclaimer: The views expressed in Energy Focus are those of individual organisations and contributors and do not necessarily represent the views held by members of the All-Party Parliamentary Group for Energy Studies. Contents Every time I start this foreword, I write that we live in interesting times, but the past few months Foreword 3 have been like no other – and certainly interesting for both UK energy policy, and for PGES. Ian Liddell–Grainger MP, Chairman of PGES

Decarbonising Heat: Green Gas 4 However, I must add a personal sad note to reﬂect on the loss of David Jefferies CBE, who died Mike Foster, Chief Executive – Energy & Utility Alliance (MARCH SPEAKER MEETING) earlier this year. It was with great sadness that we heard of the loss of David, who was a founding member of the group, was elected as a Life Member many years ago and served on Executive Decarbonising Heat: Supply of Renewable Gas 6 Council until his death in March. We will miss both him and his insight, charm and kindness. Tony Nixon, Strategy and Innovation Manager – National Grid (MARCH SPEAKER MEETING)

Decarbonising Heat: What nest for the gas Grid? 8 This edition of Energy Focus is being published as the repercussions of the EU Referendum result Neil Schoﬁeld, Head of External Affairs – Worcester Bosch (MARCH SPEAKER MEETING) to leave Europe are still being felt. We have a new Prime Minister, will have elections for the Leader of the Opposition, a new leader of UKIP, a new leader of the Green Party. DECC has been Academic Review - the future for energy 10 dismantled and a new department created, the Department for Business, Energy & Industrial Professor David Elmes, Warwick University (APRIL SPEAKER MEETING) Strategy. Academic Review - the energy trilemma 12 Professor Gavin Gillmore, Kingston University (APRIL SPEAKER MEETING) Energy is bound to be affected by at least some of this.

Academic Review - Change Ahead: Energy for Transport 14 The Group is well placed to be at the heart of helping energy policy makers to access the Doctor Adam Chase, E4Tech (for Imperial College) (APRIL SPEAKER MEETING) knowledge and understanding that is in the energy industry and academia. Our programme for the SNP Energy Policy 16 remainder of the year includes some important speakers as well as our House of Lords Dinner, Callum McCaig MP, SNP Energy Spokesman (MAY SPEAKER MEETING) which will be preceded by a new PGES Energy Policy Workshop.

PGES Summer Reception 18 That’s why, whatever the future may hold for UK energy with the UK separate from the EU, I am Obituary - David Jefferies, CBE, CCMI, FREng, FIEE 20 conﬁdent that the Parliamentary Group for Energy Studies, along with its members, will be at the forefront of the policy discussion. Statement from Angus McNeil MP 21 Chairman, Select Committee on Energy & Climate Change, on the abolition of DECC Ian Liddell-Grainger MP Department for Business, Energy and Industrial Strategy 22 The full list of ministerial responsibilities in the Department for Business, Energy and Industrial Strategy Chairman, PGES An All-Party Parliamentary Group Departmental Statements 24 Written and oral statements

Parliamentary Record 27 Select Committees, oral questions, debates and legislation

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Copyright 2016 2 Parliamentary Group for Energy Studies. All rights reserved. None of the articles or addresses in this publication may be reproduced, stored in a retrieval 3 system or transmitted in any form, by any means., electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the Copyright owner.

Printed in Great Britain by First Colour Ltd, London. a range of green gases. Perhaps of waste gives the gas its “green” study into 100 per cent hydrogen “low carbon” gas is a better credentials. The Swindon plant through the gas grid. Their Leeds DECARBONISING description. First off the blocks envisages supplying gas for HGVs 21 study is arousing considerable is biomethane. This is the gas but there is nothing to stop it interest within the industry on the captured from waste processing, being fed into the gas grid for basis that it envisages using the typically anaerobic digestion. everyday use once it is blended to existing gas grid, conventional HEAT: GREEN GAS The technology is proven, it has reach the gas quality standards heating systems such as central worked for years. Companies required. heating in the home but in a like Severn Trent clean up the completely carbon free way. biomethane from their Minworth Another “green” gas is hydrogen, Mike Foster, Chief Executive – Energy & Utility Alliance sewerage works and inject the currently produced from natural This article is not designed to “green” gas into the grid. gas using Steam Methane reach the conclusion that one [email protected] Reforming, where the carbon can single option can solve the UK’s BioSNG is next; a “green” gas then be captured. The question energy trilemma, there is no that achieves its status because is how much hydrogen can be silver bullet. However, green MARCH SPEAKER MEETING: Address to the All-Party it uses waste materials, usually used and in what manner? It gas, whatever the source, offers sent to landﬁll or incineration, is possible, within existing gas a viable way forward using our Parliamentary Group for Energy Studies to create the gas. The process is quality guidelines, to mix up to existing gas infrastructure. It technically complex, it involves 2 per cent of hydrogen into the means not turning our back on Advanced Plasma technology. blend that ﬂows through the gas but embracing it. Overall, Ofgem have recently awarded gas grid. Some studies suggest it could prove to be the most National Grid funding to develop that up to 20 per cent might be cost effective way of keeping a commercial scale plant in feasible – remember this makes people warm and meeting our Swindon, having seen the the overall mix of gas “greener”. international climate change success of smaller trials of the However, Northern Gas Networks obligations. technology. The alternative use are conducting a feasibility

King Canute could not turn back As a result of natural gas that. Switching away from gas the tides; he acknowledged his abundance, the UK has the heating will mean households powers were limited. Similarly, world’s leading gas grid face considerable up-front costs, UK politicians must recognise infrastructure in place, directly which are simply unaffordable. that our geographic location, supplying the energy to heat 85 A recent study of Bridgend, climate and weather patterns per cent of UK homes. It would produced by Wales and West are major determinants of future be a travesty not to use this Utilities, suggest that 81 per cent energy policy and that they can existing infrastructure as part of of households simply do not have Half-hourly Heat and Electricity Demand try but will fail to alter them. The the solution to the trilemma, and the cash at their disposal to make energy trilemma, a phrase that “green” gas could be the key. that investment, without massive rightly suggests the difﬁculty subsidies. in balancing the competing Heat demand is seasonal, no demands of affordability, surprise there, but its peaks There is no deﬁnition of what reliability and sustainability, during the winter either need to “green” gas is; indeed this is part should be set against the UK’s be met by supply, or people will of the attraction in that there is no particular energy needs. go cold, and no politician wants winner or silver bullet but instead

4 5 biomass-rich waste-derived The journey to decarbonising heat capture and storage the hydrogen fuels, followed by cooling, produced under this process cleaning and polishing. We use 321 TWh to heat our would be equivalent to other DECARBONISING homes each year – that’s the renewable sources. 2. Methanation – including water- equivalent of heating the water gas shift and methanation of to run eight baths per day per The gas industry is leading HEAT: SUPPLY OF the clean synthesis gas – both household. on a number of projects to established technologies. demonstrate the viability and There is an opportunity for the UK flexibility that already exists to 3. Upgrading and distribution – to be less wasteful and reduce introduce hydrogen safely into the RENEWABLE GAS ensuring product meets grid domestic demand by a third. So network. standards and injecting it into what does the opportunity look like? the grid. National Grid has requested Tony Nixon, Strategy and Innovation • Seven million homes would funding through the RIIO Network benefit from solid wall Innovation Competition, run Manager – National Grid Demonstration and insulation, which would reduce by Ofgem, to demonstrate the Commercialisation demand by 10%. capabilities of the network. The [email protected] objective is to demonstrate that To showcase the potential • The continuation of A-rated natural gas containing levels of BioSNG National Grid Gas boilers at current replacement of hydrogen beyond those in Distribution, advanced waste levels will reduce demand by the Gas Safety (Management) MARCH SPEAKER MEETING: Address to to energy and fuels company 10%. Regulations can be distributed the All-Party Parliamentary Group for Advanced Plasma Power, clean and utilised safely & efficiently in energy firm Progressive Energy • Smart thermostats are a representative section of the UK Energy Studies and Schmack Carbotech have built beginning to catch on. If they’re distribution network. Working in a test plant at Advanced Plasma GPS-enabled, and can turn on partnership with Keele University Power’s headquarters in Swindon. and off when needed, estimates and utilising the existing gas suggest a further 10% reduction infrastructure on site the project This test plant is designed to in demand. has the potential to facilitate demonstrate the technical potential 25TWh of decarbonised heat, Within the UK, the gas industry into the existing pipework – demand in 2050, which would of producing green gas, and Realistically we envisage BioSNG and more by unlocking extensive has been able to demonstrate it straight to people’s homes. equate to between 70% to 100% of has moved the technology from and anaerobic digestion facilities hydrogen use as exemplified by can facilitate the development This is sustainable, flexible, future domestic demand. concept to reality. It will also act as contributing in total around the Leeds H21 project developed of a renewable gas market economic solution that could a test bed to optimise the overall 80 to 120 TWh of renewable by Northern Gas Networks. through anaerobic digestion help the government meet its The dominant source of performance of the system. gas for injection into the gas with over 50 plants connected sustainability target. indigenous biomass is from waste grid, which combined with the Find out more about National producing enough gas to supply If more renewable or low carbon and agricultural residues. These Work has now started on a full above measures would result in Grids views on the Future of 155,000 homes (2TWh / annum) gas can be piped through the are seen as reliable feedstocks commercial demonstration renewable gas supplies for half Gas at www.nationalgrid.com/ since 2013. This process can gas network then the life of into the future as waste generation plant in order to encourage the our domestic energy needs. We futureofgas breakdown food waste, sewage the existing network, already is unlikely to reduce significantly, roll-out of a large number of believe this is a great opportunity and crops to turn into gas for substantially depreciated in terms even with increased recycling, BioSNG plants across the UK. to take further. injection into the grid. of cost to customers, can be as that will be countered by The commercial demonstration extended and puts the UK on the population growth. plant will be capable of heating However, National Grid and right trajectory to meet its carbon 1600 homes or fuelling 75 heavy Addressing the gap its partners have taken this to reduction targets. goods vehicles. It will enable the the next level in scale with the How it works industry to better understand Should we choose the above path development of Bio Substitute the contractual, commercial and to decarbonising heat, the next Natural Gas (BioSNG). This Feedstocks – Is the source of The BioSNG process involves a engineering issues related to the stages would be to consider the technology can secure low carbon energy sustainable? number of stages and chemical construction and operation of introduction of Hydrogen into the heat to millions of homes in a processes to convert the waste such facilities, the offtake of the existing gas networks across our cost effective way for between Various experts have reviewed the into syngas and then convert into fuels it produces and the supply cities and towns in the UK. a third to a half of all domestic availability of feedstocks including methane product and carbon of feedstocks. customers served today. the Climate Change Committee. dioxide by-product. Hydrogen is produced effectively In their report on Bioenergy they Ultimately it will help inform today, most commonly through Importantly, renewable gas concluded that a reasonable The three main process blocks are: policy and investment decisions Steam Methane Reforming, which requires little or no new share of potential sustainable so that engineering contractors allows natural gas to be turned infrastructure to replace fossil bioenergy supply could extend 1. Gasification – production of are willing to supply BioSNG into hydrogen and the carbon natural gas and can be injected to 200 TWh of primary energy synthesis gas (syngas) from facilities under a fixed price. extracted. Combined with carbon

6 7 David MacKay, in his capacity There are already Government- grid wouldn’t be taken lightly, we as scientific advisor to DECC, funded investigations taking do at least have a track record of DECARBONISING HEAT: suggested that we should convert place to explore the potential for having carried out a not dissimilar all 26 million of our homes to natural gas to be decarbonised overhaul in the past. use electric heat pumps – rather through its conversion to than a gas boiler – as a primary hydrogen. This approach would If the ultimate objective is to WHAT NEXT FOR THE source of heating and hot water. not only allow a boiler to be kept decarbonise heat, we would Unfortunately, despite attempts as the lead heating technology be foolish to try and do so by to stimulate the market for heat within a property, but would also removing gas from 26 million GAS GRID? pumps through initiatives such as offer extremely low carbon, high homes. The UK is a gas-fuelled the Green Deal and Renewable temperature heating – with no nation with a successful industry Heat Incentive (RHI), sales stand need for insulation levels to be and an established infrastructure at around 15,000 per year – the changed or heating systems to be that works incredibly well. Why equivalent to just three days’ overhauled. While extending this not leave our network buried boiler sales. The harsh reality is nationwide may yet be decades in the ground and remove the that renewables aren’t making away, early indications suggest carbon? The technology to make any impact on the Government’s the approach is certainly feasible, domestic appliances compatible challenging domestic emissions not least because hydrogen can with hydrogen is relatively targets which leaves us needing be produced as a by-product of straightforward, but given that to explore the alternatives. other industrial processes such the cost of doing so is relatively as nuclear power generation or expensive, political will is sure to As a nation, we are hugely hydropower. prove the deciding factor if we’re successful at making effective really serious achieving our goal. use of gas in our buildings A changeover as significant as and specifically, our homes. this one might seem daunting, Therefore it seems the most but so did the move from Town sensible route forward would be gas to natural gas in the late 60’s for us to maintain this proven and early 70’s. As an apprentice Neil Schofield, Head of External Affairs – Worcester Bosch infrastructure and decarbonise with British Gas at around that gas. After all, why fix something time, I witnessed first-hand Neil.Schofi[email protected] that isn’t broken? what a phenomenal exercise the conversion was with nowhere A look into the future near the technology we have access to today. The belief back MARCH SPEAKER MEETING: Address to the All-Party Going back to William Murdoch, then was that it was only a the kind of coal gas he invented – matter of time before the nation Parliamentary Group for Energy Studies and that we used in the UK until would run out of gas altogether – the discovery of North Sea gas in speculation we now know not to the 1960’s – actually contained be true, even before we consider When I was asked to discuss the With nearly three quarters of Leading the way around 50% hydrogen. Ironically, the exploration of shale. Gas is subject of ‘Decarbonising Heat’, the energy we consume within this is the very same element now still the most efficient and least the first thing that struck me the home used for heating and The fact that the UK has the being dubbed the future of our damaging of the fossil fuels, so was just how refreshing it was hot water and around 85% of largest gas boiler market in the gas network. while a decision to convert the to see the very word ‘heat’ on UK homes connected to the gas world is perhaps only natural the agenda. For 15 years, I – like network, the significance of gas given that we were actually the many others – have been trying boilers within the ongoing energy first to harness gas. Having been to have heat discussed as part debate is huge. 1.6 million boilers discovered by Scottish engineer, of the ongoing energy debate are installed in the UK every William Murdoch in the 1790’s, because it represents 45% of year, which equates to around we have continued to use it as a the energy we consume as a 5,000 boilers a day; ultimately fuel for over 300 years. Murdoch’s nation; yet it would be fair to say representing an industry worth experiment with gas lighting set it doesn’t quite get the attention somewhere in the region of £3.5 us down a path of longstanding it deserves. The energy debates billion a year. Despite rarely industry pedigree in the UK. of the past have frequently grabbing the headlines, the been centred around electricity heating industry is a real British What these points merge together and keeping the lights on, yet success story and a sleeping to create is an argument that the ratio of heat to electricity giant when it comes to making an says in order to decarbonise consumption within the home is impact on our emissions. heat, we should be asking how around 3:1. we decarbonise gas. The late Sir

8 9 Smart or Dumb in is ready for a lighter touch. Returns in oil and gas measured Transitions need a long term this way used to vary between 20- Ask most people when did you view, the capabilities to innovate 60% and consistently outpaced last change your thermostat ACADEMIC and the resources to invest in the the other sectors. or reprogramme your central changes needed. heating and hot water controls, Across Europe, the power sector you will get a blank look at Fit for the Challenge? is having a tough time too. In REVIEW: THE best. The UK is in the midst of a 2013, Gerard Mestrallet, the major investment in the Smart So if you choose a place along then CEO of GDF Suez (now Meter Rollout but interestingly these spectra for a certain renamed Engie) led a delegation we see the new generation of country such as the UK or even of the major power companies FUTURE FOR smart thermostats racing up on different markets within the to the European Parliament the inside lane. Whether from UK, the question is then which and reportedly saidxi “European Nest, Hive or any other providers, industries involved in the supply energy companies are experiencing discussion moves rapidly from and use of energy look fit for the ENERGY challenge of achieving a different difficulties for which there is no smart thermostats to broader precedent: the impairment of their questions about the connected future. Competition used to be European assets, the early closure home and the internet of things. among the fossil fuel, supply side of power plants, and a reduction Professor David Elmes, Warwick University It’s not just about energy; choices – Coal, oil, gas with the in investments amongst other there’s also security, wellbeing, large power stations and the grid problems. The entire sector’s [email protected] entertainment, insurance and the plus networks system we know business situation is under severe apps that bring it all together. today. Then renewables joined pressure.” Results since then Google, Amazon, Apple, Samsung the supply side mix and we have have merely illustrated those APRIL SPEAKER MEETING: Address to the All-Party are all looking to take the lead seen their prices fall and installed pressures with losses and plans with energy just one of many capacity persistently beat our for companies like E.On and RWE Parliamentary Group for Energy Studies services. forecasts. While it has always been part of the mix, the question to split themselves into “Old” and New” parts. At Warwick Business School, we investment in the more efficient distribution networks and even There are two further spectra is whether the demand side will look at how the industries that use of energy was forecast to be the grid will need to operate. that we consider at the Business take an increasing role with a Here in the UK, the CMAxii supply and use energy around just $8Trillion out of $48Trillion But the real prize is how this School but I’ll keep my comments rising proportion of investment in investigation of energy markets the world are changing, what over 2014-2035 that included both allows the more efficient use of on these brief. Not because more efficient buildings, transport is drawing to a close but I would new business models are gaining the supply and demand sides of energy overall by using the heat they’re less important but they’re and industrial processes. suggest the broader structural success, how management the equation – that’s just 17% on produced when electricity is more frequently debated at length challenges faced by the large practices are changing and how the demand side or four times generated - combined heat and in the UK. There will always be a key role power companies in Europe will is the relationship evolving more investment in the supply power (CHP) systems at various for Governments but let’s look have as greater an impact on between those industries, side. In 2015 World Energy scales and heat networks. Sustainable or Unsustainable at the commercial players in their ability to invest in a different governments and the public. Outlookiii, forecast demand side this tournament. The oil and The challenges the UK faces in energy future. investment had risen to nearly DECC’s 2013 strategy for “The gas industry has long been the meeting its climate goals has When discussing this with a third (32%) or 22Trillion out Future of Heatingiv” laid out destination for much of the been thoroughly analysed and If few governments have the companies and policy-makers we of $68Trillion over 2015-2040. the challenge that “Nearly half investment because it’s had risks the CCC’s 5th carbon budgetvi is resources to directly invest in debate the place where certain Now two data points are not a the energy we use in the UK is but delivered a high return. A currently before Parliament. This large scale energy projects, countries or markets lie on a set trend but as the goal here is used for heating of one sort or 2014 look at dividend yield across sees significant decarbonisation of this leaves the two traditional of spectra. I’d like to start by to look into the future, this is a another.” I need to declare an various global industries put Oil power, heat, buildings and transport, stalwarts of investment capacity discussing these different spectra shift in investment from more interest here as part of my time and Gas second only to property reflecting the need to address viii looking smaller and less able to and then consider who is fit to supplies to tackling how energy is is supported by the UK Research development for top returns . consumption as well as supply. take on very large scale projects used in buildings, transport and Councils to study heating and But the return on capital take on the challenge: than in the past. So if we want to industry. So fewer oilfields or cooling as part of their End employed for the major oil and Governments or Markets think about the future of energy, Supply or Demand power stations but more efficient Use Energy Demand research gas companies peaked in 2008, ix perhaps we need to think of a new cars, buildings and industrial programme – we see significant The Reset speech on energy nearly halved by 2013 and now There’s long been a culture of mix between smaller and larger, processes. opportunities for the more policy by the DECC Secretary of has slumped with hydrocarbon seeing energy as a supply side be more joined up in considering efficient supply and use of heating State in November 2015vii sought prices that look to be “lower for challenge – find more oil or build consumption as well as supply, Central or Distributed and cooling. At the University of to redefine the relationship longer.” Here in the UK, ONS another power station and the think more decentralised than Warwick, we recently invested between state and markets. statistics on company profitability problem is sorted. Along with the supply side central and consider smart as £10million in expanding our The UK has a history of raising show the North Sea oil and gas culture there has been a big is part of services that reach well combined heat and power system energy to departmental status industry hitting an all-time low Only in 2012 did the energy better culture. Big, centralised beyond today’s energy market. and extend our heat networkv, with more direct government for net rate of return of 0.6% in industry bible, the International projects connected to a grid offer That expands the industries, something our Vice-Chancellor involvement, then downgrading Q4 2015, well below the UK’s Energy Agency’s World Energy cheaper energy. With just a few companies, institutions and was happy to support when we it. The challenge today is manufacturing sector at 7.2% Outlook start including a chapter signatures on a few big deals, the x government departments explained how much it would whether the transition we’re now or the service sector at 22% . on energy efficiencyi. The IEA problem is sorted. involved. reduce our gas bill, as it now has recently started gathering has. Our use of CHP and a heat data on the future investment Locally produced and consumed i http://www.worldenergyoutlook.org/weo2012/ network takes the efficiency we needed to meet the world’s needs energy is now more common; ii http://www.worldenergyoutlook.org/investment/ use gas from 30-50% to 80-85% iii http://www.worldenergyoutlook.org/weo2015/ for energy. In the 2014 World local solar and wind for example. and save us 5000 tonnes CO of iv https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/190149/16_04-DECC-The_Future_of_Heating_Accessible-10.pdf Energy Outlookii, future capital This will change the way our 2 v https://www2.warwick.ac.uk/insite/news/intnews2/green_gown_2015/ emissions each year. vi https://www.theccc.org.uk/publication/the-fifth-carbon-budget-the-next-step-towards-a-low-carbon-economy/ vii https://www.gov.uk/government/speeches/amber-rudds-speech-on-a-new-direction-for-uk-energy-policy viii http://about.bnef.com/content/uploads/sites/4/2014/08/BNEF_DOC_2014-08-25-Fossil-Fuel-Divestment.pdf 10 ix http://www.guinnessfunds.com/wp-content/uploads/2014/06/2014.06-Return-of-returns.pdf 11 x http://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/bulletins/profitabilityofukcompanies/octobertodecember2015 xi http://www.ft.com/cms/s/0/c5f0949e-9316-11e3-8ea7-00144feab7de.html#slide0 xii https://www.gov.uk/cma-cases/energy-market-investigation lead to considerable savings (25% understanding of the resources • Efficient use of energy and per year in energy bills). beneath our feet. better design. Smart meters are only as smart as designers ACADEMIC REVIEW: Where other energy efficiencies Comments so far have concerned and users. We need to think are concerned – wind turbines energy efficiency and generation more about the technology-user can be made more efficient by with regards to domestic / interface. THE ENERGY utilising nano-coatings developed business supply. However we also for aircraft which are designed need to consider transportation. • Lastly we need to better to shed water, prevent the Recent announcements by VW quantify unknowns, e.g. shale build-up of ice, improve fuel concerning development plans gas. TRILEMMA efficiency, reduce drag and for electric vehicles (EVs) after improve performance. This is the diesel emissions scandal So what are the solutions for our the focus of a British Council suggests where the future lies. Energy needs? Is it in examples Professor Gavin Gillmore, Newton Fund Workshop in China EVs used to be seen as oddities such as the 240m solar tower this August on ‘Multidisciplinary with significant range issues. (250MW nameplate capacity; Kingston University issues of Wind Power in Cold However some companies have 1% of Israel’s electricity); the Environments’, when 17 early- made EVs fashionable. Good Swansea Bay Tidal lagoon [email protected] career researchers will meet design will drive consumer (320MW installed capacity, colleagues from China (the confidence in energy efficient 155,000 homes, requested strike world’s largest manufacturer of products. Kingston University price £168 / MWh); or Hinkley APRIL SPEAKER MEETING: wind turbines). Ice formation on have an e-bike (the Ion Horse) nuclear power station (3.2 GW, 5 wind turbine blades can reduce - an electric superbike (0-60 million homes, strike price £90 / Address to the All-Party power generation efficiency by 3 seconds, 160mph top speed, MWh)? Whatever direction the UK as much as 50%. Similarly, the range 120 miles at legal speeds, takes, many potential developers Parliamentary Group for use of magnetic bearings means 2013 e-bike record holder). are crying out for more stability in reduced wear on wind turbines Such headline products helps to the energy sector for investors. Energy Studies components, maintenance being popularise EVs. a significant issue for offshore fields. It is interesting to note that UK The Energy Trilemma If we consider two recent Training Alliance (DTA) in Energy Research Councils are currently demonstrates that there is press stories one concerning which will have 70+ Energy PhD One of the key aspects of UK growing investment in energy a balance required between ‘fantabulous’ results for the students by the end of 2019. This government plans concerns storage, efficiency and whole energy security, equity and Gatwick oil well, and the other should encourage those who seek shale gas development. However energy systems, although the environmental sustainability. EDF and Hinkley delays – one to develop energy technologies. much is still unknown. Targets biggest budget is for fusion These terms can be defined as:- might ask what is the future With more efficient renewables for exploration (e.g. Bowland research. - hydrocarbons and nuclear? we can make a greater impact on Shale, north-east England) • Energy security – effective Government rhetoric certainly carbon budgets. have been insufficiently So to summarise what the keys management of energy supply appears to revolve around characterized. In the USA 10+ are for the future for UK energy. from domestic and external filling our energy gap with shale Coming back to future UK Energy wells / day are drilled to assess sources which includes energy gas (short-term) and nuclear – there is much to commend and develop shale gas. In the • The training of professionals infrastructure reliability and (long-term) as base-line energy a focus on energy efficiency. UK (due to political sensitivities so that they are not just the ability of energy providers sources. In response to nuclear Perhaps we have not focussed and a lack of investment) only engineers but can relate to the to meet demand. development delays the life enough attention on this? We all a handful have been drilled. social, economic and political of nuclear plants have been want to use, waste and pay less Data on potential targets then aspects of energy, to enable • Equity – accessibility and extended, and developing shale for energy. How can we then is scarce and companies that better communication with affordability of energy supply gas plays does not necessarily encourage people to take control have information are naturally members of the public and across the population. help our carbon budget, so we of their own energy? The use of unwilling to share. Many politicians. Groups such as the need to perhaps focus on other smart meters and understanding questions remain unanswered PGES encourage this dialogue. • Environmental sustainability approaches. how we can best integrate smart with different organisations It is easy for an academic to – supply and demand side systems into our decision making holding fragmentary information. focus on detail and not see the energy efficiency and the There are many organisations processes is one way forward. Some Universities are investing in bigger picture, and perhaps development of energy focussing on this energy gap, Smart meters / valves are only their own research programmes for politicians to not fully supplies from renewable / low with universities developing useful though if the way that we – for example Kingston has a understand detail. Now is the carbon sources. Energy research centres such as use such systems and how they project to characterize Bowland time to enter into such dialogue at Kingston University. Thirteen relate to us is fully considered in Shale organic material. Shale and help organisations such What is the future for energy in universities have also clubbed the design process. Research at gas is a logical way to bridge as the DTA Energy programme the UK in the light of this? together to develop a national Kingston in Halls of Residence the energy gap but development design projects that make a University Alliance Doctoral has shown that such systems can continues to be hampered by poor real difference.

12 13 ACADEMIC REVIEW: CHANGE AHEAD: ENERGY FOR TRANSPORT

Doctor Adam Chase, E4Tech (for Imperial College) [email protected] APRIL SPEAKER MEETING: Address to the All-Party Parliamentary Group for Energy Studies

It is axiomatic that there will be alternatives and the rising different options to flourish in the vehicle can be recharged long term bulk storage. Fuel cell CO2, especially if made in a form change in the UK energy system. demand for transport globally. accordance with their potential. externally that the energy cars (and buses) are entering that can be blended into diesel However, ‘energy’ is often used In the UK, transport is the only An important additional factor equation changes significantly. the market in limited numbers, without requiring engine changes. as shorthand for electricity energy use to have increased in for road transport is the local Plug in hybrids and full battery but they rely upon hydrogen Natural gas and its low carbon which is misleading and also the four decades to 2010, though pollution that accompanies many electric vehicles are coming to infrastructure development substitute biomethane are a ignores the important aspects efficiency improvements have of the fuels (not just diesel). market in force, offering potential which is in its infancy and near term alternative, although of change that are system-wide. led to a modest decrease in The current energy mix for road real world efficiency gains, has an attendant first mover methane leakage throughout This talk provides a different recent years. This is as a result transport is comprised almost access to increasingly zoned disadvantage, with a dozen the supply chain negates some perspective by looking at of vehicle efficiency standards, entirely of liquid fuels, largely cities and a driving experience stations currently being built in of the benefits. In the medium changes expected in one of the now widely recognised as a of fossil origin. The rate of fleet that drivers enjoy. Drawbacks the UK. Hydrogen and fuel cell term heavy duty vehicle fuels major energy end use sectors – vital mechanism by energy and turnover for all vehicles, and remain for consumers in the vehicles are at the extreme end of could also include renewably road transport. climate policymakers, and one the difficulty of converting long form of higher purchase cost and the energy economist’s spectrum produced alcohols, ethers and that industry has responded to distance heavy (i.e. high energy slow recharge time. Whilst both of market failures, but their synthetic fuels. Pragmatic E4tech is a strategic consultancy effectively. consuming) vehicles to other will be mitigated to some extent potential benefits in the long term vehicle operators will only whose work is focused on fuels, mean that in 2030 at least by innovation, there are other mean that serious attention is consider alternatives if there are sustainable energy, working Efficiency standards define a three quarters of the energy mix considerations for the energy still merited. obvious economic and technical with companies, investors and destination for auto companies, will remain liquid fuels. Future system that remain unresolved. advantages relative to diesel, government organisations but it is roadmaps and the solutions need to address this Use of electricity to decarbonise There are several energy options though it is worth noting that worldwide since 1997. An innovations within them that reality and it is best to consider transport relies upon accelerating for light duty vehicles and it is there are twenty times fewer extensive body of work on define the routes. Numerous light and heavy duty vehicles efforts to decarbonise certain that the powertrains heavy than light vehicles and even vehicles and fuels informs such roadmaps have been separately. electricity generation. Also, of the future in this sector will fewer buyers (fleet operators) to our perspective on the energy developed, and it is instructive to recharging places demands be highly electrified, in some be influenced. transition in all forms of look at those of the Automotive Light duty vehicle powertrains on local electricity distribution cases in combination with an transport. Council – a UK Government and are undergoing more innovation infrastructure that impose alternative form of propulsion In summary, the energy vectors industry co-operation – which than at any time in the past upstream costs which need to be system for increased range. for transport are in flux and are Globally 23% of man-made are developed with a wide 100 years. Not only are the reallocated. Heavy duty vehicles on the increasingly linked to the wider CO2 emissions are caused by stakeholder consensus. The immediate pressures of efficiency other hand have a much smaller energy system. Future policies transport, three quarters of which roadmap for energy, below, targets leading to dramatic System considerations lead to number of viable alternatives, should therefore be considered are from road transport, split illustrates the complexity ahead. improvements in internal hydrogen, sometimes called the with electric propulsion an in that context. The destination roughly evenly between heavy combustion engines with more to ‘ultimate fuel’ due to its zero unrealistic prospect for long is becoming clear, but there duty vehicles (trucks and buses) In practice not all of these energy come, but new energy vectors are emission potential. Low carbon distance transportation (without are many routes and none of and light duty (cars, motorcycles vectors can dominate and policy becoming serious alternatives. hydrogen can be made from a viable technologies to transmit them are easy. One thing is and vans). Road transport is has a vital role to play. However Biofuels already make a small variety of sources such as natural power to moving vehicles or certain however, policy has an a material global emitter, a policy should create sufficient but growing contribution and gas with CCS, or (intermittent) store large volumes of hydrogen). increasingly valuable role to play problem compounded by the certainty about the goals without hybridisation is a ‘given’ for renewable electricity for which Sustainably sourced biofuels offer in reinforcing the direction and relative difficulty of applying preselecting the routes, allowing most new cars, but it is when it offers a low cost option for a realistic option for lowering speed of travel.

14 15 supported in its efforts to reduce south of England would be paid to of an Oil Fund to smooth out its costs through the CfD bidding connect. Locational Transmission the peaks and troughs in process. The early closure of the Charging is failing Scotland and what is a volatile commodity SNP ENERGY Renewables Obligation and the its defined purpose of promoting market - a move which would prolonged uncertainty over future electricity production close to undoubtedly have helped deal CfD allocation has in our view dense population (read London) with the current low oil price. POLICY damaged investor confidence is not working. Like the UK Despite the incredibly difficult unnecessarily and will either generally, Scotland needs a economic position in the North make meeting decarbonisation balanced energy mix - locational Sea, production did rise last year unlikely or at very least more transmission charging is the and the industry made strong expensive. greatest impediment to that and it efforts to reduce costs to adapt must be scrapped. to a ‘lower for longer’ business. Scotland has a quarter of We welcomed the moves to Europe’s offshore wind and The SNP has a long standing reduce the headline rate of tax, tidal potential and a tenth of opposition to nuclear but remain of the view that a full the wave potential so we are of power based on cost and sale review of the tax system is the firm view that with the right decommissioning. Utilising required if the aims of the Wood support marine renewables in planning legislation we took Review to Maximise Economic Callum McCaig MP, SNP Energy Spokesman Scottish Waters will play a key the position that there will be Recovery of the 20bn barrels is to role in electricity generation and no new nuclear in Scotland, but be achieved. [email protected] supply to our nation and beyond. the Scottish Government has Under the SNP’s leadership we worked constructively with EDF, Devolution is meant to provide are at the forefront of marine the owners of Hunterston and the nations of the UK with renewables development. Statoil Torness, to safely extend the the opportunity to do things MAY SPEAKER MEETING: Address to the All-Party is to commission the world’s first operation lifetimes of those two differently, but in when it comes Parliamentary Group for Energy Studies floating wind farm off the coast stations. The plants themselves to energy it is failing. At the of Peterhead, and the Scottish come offline in the 2020s and we General Election the SNP won Government has supported the want to see the capacity replaced more than half the vote, the development of wind and tidal with renewable combined with Tories won only a single seat, electricity generation through CCS enabled gas plants. The but there is no flexibility in the Wave Energy Scotland and the SNP group at Westminster has UK Government’s energy policy The SNP’s energy policy is grown intelligence and adapt it to Scottish produced renewable world-leading European Marine opposed the construction of the to allow a different approach in focused on taking the natural other energy trades. electricity to the rest of the UK Energy Centre on Orkney. new Hinkely Point C reactor Scotland. Supply margins are resources of Scotland and would be win-win. We would see and in our alternative queen’s tightening and major questions utilising them in the best way Using the powers at Holyrood, investment and jobs in Scotland The closure of Longannet power speech called for the programme exist about the twin pillars of their for long-term use and benefit in particular: planning; building and cheaper decarbonisation for station in March signalled the end to be scrapped and investment policy of Nuclear and Fracking. to people living in this country, regulations; climate change UK energy consumers. of coal fired energy generation redirected to renewables, A diverse energy mix is required and on this planet. Scotland is legislation, we have pursued in Scotland and was hastened electricity storage and CCS and in Scotland there is both an energy rich nation, yet levels a different path from the UK In order to meet our ambitious by the additional costs that to provide a secure, safe and potential and desire to deliver of fuel poverty are unacceptably Government. We have a ban on climate change targets currently producers there faced through affordable energy supply. that, but without recognition of high. We need to change that, nuclear energy and a moratorium legislated for at 42% by 2020 (but discriminatory transmission the differing needs our enormous and we need to do it without on unconventional onshore oil with a commitment to increase charging. Longannet had a £40m The North Sea oil and gas sector potential will not be realised. compromising our environment and gas extraction, and even this to 50%) the SNP-led Scottish per annum charge to connect to remains fundamental to the Without change we are facing a and our safety. took the step to designate Government has a commitment the grid, and a new Combined UK’s primary energy demand. tremendous waste not just for energy efficiency as a National to see 100% equivalent of Scottish Cycle Gas power plant with Regrettably, successive UK the people of Scotland, but for There is potential for us to build Infrastructure Priority. electricity consumption generated connection charges in the region Governments have not followed everyone on these isles. on our impressive renewable from renewables. It is important of £20m; an identical plant in the the SNP’s calls for the creation deployment, if we take action We have pushed the powers at to note that this is not 100% of now. Scotland can be a world Westminster to change direction electricity consumption, as we leader in marine renewables and support renewables; believe thermal generation, by harnessing the skills and investment in carbon capture particularly gas, is a necessary expertise of our globally storage; change transmission party of a balanced electricity renowned subsea sector. charging that disincentivises mix. Over the past forty years we electricity production in Scotland; have witnessed remarkable undertake a full scale review of In Scotland onshore wind is a engineering achievements in the oil and gas taxation; and review success which we believe has a oil and gas industry, so it makes the policy framework around role to play in a balanced energy sense to embrace that home- electricity storage. Exporting mix going forward, so it should be

16 17 PGES SUMMER RECEPTION TUESDAY 29TH JUNE 2016 Sponsored by Wales & West Utilities Ltd

Guest of Honour Philip New, CEO of Energy Systems Catapult

Ian Liddell-Grainger MP Stephen Edwards Philip New Philip New, Steven Edwards, Elizabeth Warwick, Ian Liddell-Grainger Wales & West Utilities Energy Systems Catapult

John Quigley, Andrew Cowgill, Barry King, Andrew Furlong, Louise Kingham, Paul Troughton, Patrick Liddy, Ann Robinson, Louis Pickersgill Martin Fry, Graham Ward, Louise Kingham Mike Gibbons, Angus MacNeil MP, Tahir Majid, Will Chilvers Graham Ward, John Hall Lord Redesdale Steven Edwards

Sponsored by

Lord Skelmersdale, Barbara Vest, Andrew Bainbridge, Helen Poole, David Lewis, Andrew Bainbridge Judith Ward, Louise Kingham, Alan Thompson, Sul Alli Pat Glass MP, Andrew Furlong Iain Poole, Lord Stoddart Amanda Rayner

Ann Robinson Andrew Bainbridge, Lord Stoddart, Nigel Richardson, Laura Morris Ian Graves, Dr Paul Troughton, Dr Rachel Hall Claire Nequest, Louis Pickersgill, Paul Needley Ashutosh Shastri 18 19 OBITUARY STATEMENT FROM David George Jefferies, CBE, CCMI, FREng, FIEE ANGUS MACNEIL Born December 26 1933, died March 19 2016

David Jefferies, long serving David served as chairman of On 14th July 2016, Angus from their 1990 baseline? member of the PGES Executive London Electricity Board before Brendan MacNeil MP, Chair Which Department will take Council and former chairman becoming deputy chairman of of the Energy and Climate responsibility for the energy and of National Grid, died suddenly the Electricity Council in the Change Committee, issued climate aspects of negotiations aged 82 after returning from a run-up to privatisation. He the following statement in to leave the EU? Who will holiday in South Africa. moved to the Central Electricity response to the announcement champion decarbonisation Generating Board (a rare step) that the Department of Energy in Cabinet? Who will drive He was one of our founding as director for the North West. and Climate Change is to be innovation in the energy sector? members and was awarded Life Subsequently he was also abolished. Membership many years ago. As chairman of Viridian, the parent Turning to my Committee and such was an active supporter of company of Northern Ireland “The Government has announced the crucial role we play in the Group, regularly attending Electricity. that it will abolish the Department scrutinising the Government’s meetings and events. of Energy and Climate Change energy and climate change David served as a director of and transfer its functions to policies, we are established Keen to encourage, taking time to the Strategic Rail Authority, was other Government Departments, under Standing Orders of the offer help and assistance, David chairman of the construction notably the new Department of House of Commons. There was much respected figure in and civil engineering group Business, Energy and Industrial will be no immediate change energy. Costain and was involved in a David at one of the many PGES Strategy. The exact details remain to our remit, operations or number of smaller companies. In functions he attended. David unclear. membership, which can only a statement including the He played a central role in the later years he travelled to many was an active member of PGES be done by order of the House. following: privatisation of electricity and was other countries offering advice and served on Executive Council My Committee’s reports have I am immensely proud of our later caught in a fierce political on industry restructuring and the for many years. recently identified serious work over the last year to hold “The Department for Energy row over remuneration for utility introduction of private capital. concerns about reduced investor the Government to account on and Climate Change and the chiefs. He was an electrical confidence in the UK energy achieving a balanced energy remaining functions of the engineer with unusually wide He was at various times president sector. An historic agreement at policy, setting the agenda on an Department for Business, hands-on experience of the of the Institute of Energy, the COP21 in Paris last December innovative future energy system, Innovation and Skills have distribution and generation of Electricity Association and the still requires ratification, and the and influencing the Government’s been merged to form a new power. Institution of Electrical Engineers, fifth carbon budget is still yet to long-term approach to climate Department for Business, a board member of the Royal be set in law. While Members targets. Over the coming weeks Energy and Industrial Strategy, A man of great persuasive Institution and master of the Wax of my Committee differed in I will speak to colleagues to bringing together responsibility charm, David was a formidable Chandlers’ Company. He was their views on the European explore how we can ensure that for business, industrial strategy, negotiator. The structure put in appointed CBE in 1990. Union, the immediate impact effective Parliamentary scrutiny and science and innovation with place in the 1990 privatisation He will be sorely missed by the of the vote to leave has been to on the crucial issues of energy energy and climate change was much in tune with his Group. amplify uncertainty at a time and climate change continues.” policy. The new Department thinking. when major investment is needed will be responsible for helping to deliver affordable, clean and When asked by Energy Focus, to ensure that the economy David was born at Newham in secure energy. In this context, Angus added, “I HOPE that grows strongly in all parts of East London on Boxing Day 1933 I am astonished at the Prime Theresa May is not taking her the country, based on a robust and educated at local schools, Minister’s decision to abolish eye of the ball as regards to industrial strategy. It will ensure with an interlude as an evacuee DECC. energy. Especially important that the UK has energy supplies in Devon during the war. He around security of supply in that are reliable, affordable and studied electrical engineering DECC’s disappearance raises coming winters - nothing ends a clean; and it will make the most at South East Essex College of urgent questions. To whom falls Government or a Prime Minister of the economic opportunities of Technology before joining the the central statutory obligation, faster than an energy crisis.” new technologies, and support Southern Electricity Board, where contained in the Climate Change the UK’s global competitiveness he rose to be area manager for Act 2008, to reduce the UK’s On 18th July, the Prime Minister, more effectively.” Portsmouth in and chief engineer. carbon emissions by 80% Theresa May, MP, issued

20 21 ouse of Commons

epartment for Business, Energy and Industrial Strategy The full list of ministerial responsibilities in the Department for Business, Energy and Industrial Strategy (BEIS) has now been confirmed. (st August )

e Rt reg on Clar MP Seretary of State for Business, Energy and Industrial Strategy ollowing s hi appointment as the Secretary of State, Greg Clark said the department was charged with delivering a comprehensive industrial strategy, leading governments relationship with business, furthering our worldclass science base, delivering affordable, clean energy and tackling climate change.

Ni urd MP, Minister of State for Climate Cange and Industry The minister is responsible for:

� climate change � carbon budgets � international climate change, including International Climate und � climate science innovation and � green economy, including the Green Investment Bank � industry and enterprise � advanced manufacturing � materials � automotive

Jo Jonson MP, Minister of State for niersities, Siene, Resear and Innoation oint minister it epartment for Eduation The minister is responsible for:

� higher education � science and research � life sciences � agritech industrial strategy � innovation � space

Baroness NeilleRolfe, Minister of State for Energy and Intelletual Property The minister is responsible for: Baroness Neville-Rolfe, Minister of State for Energy and Intellectual Property The minister is responsible for: DEPARTMENT� energy (with the FOR Minister for Industry and Energy) � nuclear • energy (with the Minister for Industry and Energy) � international energy � oil and gas, including shale gas • nuclear BUSINESS,� �ENERGY low energy carbon security, generation including resilience and emergency planning • oil and gas, including shale gas �� intellectual security of property supply • low carbon generation �� EU electricity international single and market energy gas wholesale markets and networks • security of supply • electricity and gas wholesale markets and networks AND INDUSTRIAL�� Lenergy ords energy lead efficiency security, on all including and BEIS issues heat, resilience including fuel poverty and emergency planning • energy efficiency and heat, including fuel poverty ouse of Commons � �intellectual smart meters property and smart systems • smart meters and smart systems � EU single market ouse of Commons • international energy epartment for Business, Energy and Industrial Strategy � Margot Lords lead James on MP, all Minister BEIS issues for Small Business, Consumers, and Corporate Responsibility STRATEGY • energy security, including resilience and emergency planning ouse of Commons The epartment full list for of ministerial Business, responsibilities Energy and Industrial in Strategy the Department for Business, Energy and Industrial The Parliamentary Under Secretary of State supports the Minister for • Climate Change and Industry. intellectual property The full list of ministerial responsibilities in the Department for Business, Energy and Industrial Strategy Strategy The full (BEIS) list has of ministerial now been confirmed. responsibilities (st August ) in the Department for Business, Energy and Industrial • EU single market epartment (BEIS) has now for been Business, confirmed. (1st Energy August and 2016)Margot Industrial Strategy James MP, Minister for Small Business, Consumers, and Corporate Responsibility st Responsibilities include: Strategy (BEIS) has now been confirmed. ( August ) The full list of ministerial responsibilities in the Department for Business, Energy and Industrial • Lords lead on all BEIS issues e Rt reg on Clar MP Seretary of State for Business, st The Parliamentary Under Secretary of State supports the Minister for Climate Change and Industry. Strategy (BEIS) has now been confirmed. ( August � small ) business (including the Small Business Commissioner, Energy e Rt and reg on Industrial Clar MP Strategy Seretary of State for Business, Responsibilities Groceries include: Code Adjudicator, Pubs Code Adjudicator) Margot James MP, Minister for Small Business, Consumers, and Corporate Responsibility ollowing Energy s hi and appointment Industrial as the Strategy Secretary of State, Greg The Rt Hon Grege Clark Rt MP - reg on Secretary Clar of State MP Seretary for Business, of State for Business, Energy and Industrial Strategy� enterprise and British Business Bank The Parliamentary Under Secretary of State supports the Minister for Climate Change ollowing s hi appointment as the Secretary of State, Greg Energy and � small Industrial business (including Strategy the Small Business Commissioner, Clark said the department was charged with delivering a Following his appointment as the� Secretaryretail sector of State, Greg Clark said the department and Industry. comprehensive Clark said industrial the department strategy, was leading charged governments with delivering a was “charged withollowing delivering s hi a� comprehensive Groceries appointment consumer as Code industrial and the Adjudicator, Secretary competition strategy, leading of (including Pubs government’s State, Greg Code Adjudicator) energy retail markets, Responsibilities include: relationship comprehensive with industrial business, strategy, furthering leading our world class science governments relationship withClark business, said furthering� the enterprise competition our department world-class and law British science was and base, charged Business Companies delivering Bank with delivering a House) relationship with business, furthering our world class science affordable, cleancomprehensive energy and� tackling retail industrial climate sector change”. strategy, leading governments base, delivering affordable, clean energy and tackling climate � deregulation and regulatory reform • small business (including the Small Business Commissioner, Groceries Code � consumer and competition (including energy retail markets, base, delivering affordable, clean energy and tackling climate relationship � with labour business, markets furthering including our world class trade science union and employment law Adjudicator, Pubs Code Adjudicator) change. competition law and Companies House) change. base, delivering � corporate affordable, governance clean energy and tackling climate • enterprise and British Business Bank � deregulation and regulatory reform change. � local growth • retail sector Ni urd MP, Minister of State for Climate Cange and Industry � labour markets including trade union and employment law Ni urd MP, Minister of State for Climate Cange and Industry � Insolvency service • consumer and competition (including energy retail markets, competition law and � corporate governance Companies House) The minister is responsible for: Ni urd MP, Minister of State for � Land Climate Registry Cange and Industry The minister is responsible for: Nick Hurd MP, Minister of State� forlocal Climate growth Change and Industry • deregulation and regulatory reform � Ordnance Survey • labour markets including trade union and employment law � climate change The minister is responsible for: � Insolvency service climate change � postal affairs • corporate governance �� carbon budgets The minister is responsible for:� Land Registry � Royal Mail • local growth � carbon budgets � climate change � Ordnance Survey � international climate change, including International Climate und • Insolvency service � international climate change, including International Climate und � carbon budgets• climate change � EU structural funds � climate science innovation and � postal affairs • carbon budgets � national minimum wage • Land Registry � climate science innovation and � international climate change, including � Royal International Mail Climate und � green economy, including the Green Investment Bank • international climate change, including International Climate Fund • Ordnance Survey � green economy, including the Green Investment Bank � climate science innovation and � industry and enterprise • climate science and innovation� EU structural funds • postal affairs � industry and enterprise � green economy, including the Green Investment Bank • green economy, including� the Jesse national Green Norman Investment minimum Bank MP, wage Minister for Industry and Energy • Royal Mail � advanced manufacturing � industry and enterprise � advanced manufacturing • industry and enterprise • EU structural funds � materials � materials � advanced manufacturing• advanced manufacturing The Parliamentary Under Secretary of State supports the work of the Minister for Climate Change • national minimum wage � automotive � automotive � materials • materials Jesse and Industry Norman and MP, Minister the Minister for Industry for and Energy Energy and Intellectual Property. � automotive • automotive The Parliamentary Under Secretary of State supports the work of the Minister for Climate Change Responsibilities include: Jesse Norman MP, Minister for Industry and Energy Jo Jo Jonson Jonson MP, MP, Minister Minister of of State State for for niersities, niersities, Siene, Siene, Resear Resear and Innoation oint minister and Innoation oint minister and Industry and the Minister for Energy and Intellectual Property. The Parliamentary Under Secretary of State supports the work of the Minister for it epartment for Eduation Jo Jonson MP, Jo Minister Johnson MP of , Minister State of State for � forindustrial niersities, Universities, policy Science, Siene, (supporting Research Resear and the Innovation and Minister Innoation oint minister for Climate Change and Climate Change and Industry and the Minister for Energy and Intellectual Property. it epartment for Eduation Responsibilities include: it epartment for (joint Eduationminister with Department forIndustry) Education) The minister is responsible for: technology Responsibilities include: The minister is responsible for: � industrial � policy (supporting the Minister for Climate Change and The minister is responsible for: The minister is responsible for: Industry)� infrastructure/construction � higher � higher education education • industrial policy (supporting the Minister for Climate Change and Industry) � higher education � � technologyaerospace • technology � science � science and and research research • higher education � science and research � � infrastructure/constructionprofessional services • infrastructure/construction � life � life sciences sciences • science and research � � aerospacerail supply chain • aerospace � agritech industrial strategy � life sciences • life sciences � agritech industrial strategy � energy policy (supporting the Minister for Energy and Intellectual Property) • professional services � agritech industrial • agri-tech strategy industrial strategy � professional services � innovation� innovation • rail supply chain � innovation • innovation � � rail nuclear supply chain � space� space • energy policy (supporting the Minister for Energy and Intellectual Property) space • space � energy � oil policy and gas, (supporting including the shale gas Minister for Energy and Intellectual Property) � • nuclear � nuclear Baroness Baroness Neille NeilleRolfe, Rolfe, Minister Minister of of State State for for Energy Energy and and Intelletual Intelletual Property Property • oil and gas, including shale gas Baroness NeilleRolfe, Minister of State for � Energy oil and and gas, Intelletual including Property shale gas There are two Joint Permanent Secretaries: The The minister minister is is responsible responsible for: for: There are two Joint Permanent Secretaries: Alex Chisholm and Sir Martin Donnelly KCB CMG. The 22 minister is responsible for: Alex Chisholm 23 � energy � energy (with (with the the Minister Minister for for Industry Industry and Energy) and Energy) There are Sir two Martin Joint Permanent Donnelly Secretaries KCB CMG : � energy (with the Minister for Industry and Energy) � nuclear� nuclear Alex Chisholm � nuclear � oil � oil and and gas, gas, including including shale gas shale gas Sir Martin Donnelly KCB CMG � oil and gas, including shale gas � low � low carbon carbon generation generation � low carbon generation � security of supply � security of supply � security of supply � electricity and gas wholesale markets and networks � electricity and gas wholesale markets and networks � electricity and gas wholesale markets and networks � energy efficiency and heat, including fuel poverty � energy efficiency and heat, including fuel poverty � energy efficiency and heat, including fuel poverty � smart meters and smart systems � smart meters and smart systems � smart meters and smart systems which doesn’t consider the range of businesses In response to these findings, in this Parliament the and business models they affect – leading to Government will commit to achieving the following: DEPARTMENTAL STATEMENTS unnecessary burdens. Business told us that Department for Energy & Climate Change. regulations don’t distinguish between a very a) A longer term narrative with a clear approach to competitive business to business market, and a less policy, which considers the breadth of the market. Statement by the Rt Hon Amber Rudd, Secretary of State, 13th June 2016 competitive domestic market. We were also told that The forthcoming Strategy and Policy Statement, there is no regulation specific to energy storage and which DECC will aim to consult on by Summer 2016, The Council, chaired by the Dutch Presidency, would apply not only to EU Member States but to that the permitting regime for offshore renewables will outline the respective responsibilities of DECC featured discussions around a central theme of Energy Community States; a group of countries from is too complex and not designed with businesses in and Ofgem. DECC will also develop, and publish by energy security. South East Europe and the Black Sea region. mind. Wind farms told us that the lack of guidance the end of 2016 a clearer approach to working and on negotiating with airfields during the mitigation communicating with stakeholders in an effective The meeting began with the Council approving a Later, the Dutch Presidency presented their planning process causes a significant financial and efficient way and will produce a regular (e.g. General Approach on the proposed Decision with conclusions on electricity market design which they burden and we were told that aviation interests annual) forward look – outlining the priorities and regard to intergovernmental agreements (IGAs) in hoped would provide guidance to the Commission on continued to hold up schemes because of their lack key changes in the energy sector over each coming the field of energy. their proposals due out by the end of the year. of responsiveness. year including, where appropriate, a timetable for Contracts for Difference. Ofgem is committed to For the second agenda item European In the afternoon the Council listened to presentations b) Data Reporting is too frequent, overlapping and “getting out of the way” while maintaining vigilance Commissioner Miguel Arias Cañete opened a policy from the Dutch Presidency on the security of supply can be too onerous. There are multiple and frequent to protect consumers, introducing clear and robust debate on Gas Security of Supply by calling for of medical radioisotopes to promote a longer term, overlapping data requests each requiring a slightly Impact Assessments for regulatory changes. As improvements to regional cooperation, solidarity more sustainable market. This was followed by different format, unnecessarily taking time away part of its Innovation Plan to be published by Budget and the transparency of commercial gas contracts. a presentation from the Slovak Minister on their from businesses. Specific regimes which businesses 2016, Ofgem will continue to consider where its This was in order to address vulnerabilities that forthcoming Presidency’s work programme. told us had particularly onerous reporting regulation could be more agile, for example to give still exist in the case of major disruptions to gas requirements were the CRC Energy Efficiency greater flexibility to accommodate local energy supplies. Interventions from Member States The Council ended with an update from Scheme [CRC], Energy Savings Opportunity solutions, demand-side and flexible response were mixed; some supported the Commission’s Commissioner Cañete on recent events in Scheme [ESOS] the Climate Change Levy [CCL], services, and storage. These next steps will approach whereas others referenced the need for international relations as well as progress on the Carbon Price Floor (CPF), the Renewables address the findings in paragraph a and d. a more flexible, voluntary approach to regional implementing the Commission’s strategy on LNG Obligation [RO] and the Energy Company Obligation configurations. There was further discussion on the (liquefied natural gas) storage which is to be [ECO]. Businesses also told us of a number of EU b) A more joined up approach. DECC and Ofgem concept of solidarity arrangements and how these implemented later this year. or international treaties which cause reporting have formed a Working Group to look at data and or financial burdens including REMIT and the EU information requests issued by both organisations. Department for Business, Innovation and Skills Emissions Trading System [EUETS]. This will develop a more streamlined and, where Extract from “Cutting Red Tape - Review of the energy sector” possible, shared approach to making information and c) Adhering to the required legislation, codes, data requests to the industry by Summer 2016. This This report, produced by the Department for Business, review is a short, sharp investigation of stakeholder rules, and other statements can be burdensome will support industry and reduce burdens by making Innovation and Skills summarises the findings of the experiences and evidence; they are carried out by a because they are difficult to locate, expensively sure that bodies are as joined up as possible. These Cutting Red Tape review of regulatory barriers to small review team and typically involve a six to eight governed, and sometimes contradictory. The first next steps will address the findings in paragraph b. growth, productivity and innovation in the energy sector. week fieldwork phase. burden was as simple as locating all of these rules in their most up to date format. Businesses told us c) Simplifying processes and rules, and adopting The review is one of a series that examine whether This review was run jointly by the Cabinet Office, the Licences required to supply energy had grown a risk based approach to compliance. Ofgem is legislation can be simplified or improved to reduce Department for Business Innovation and Skills (BIS), in complexity and that code changes are costly, committed to moving to a more principles-based unnecessary burdens on business. the Department of Energy and Climate Change (DECC) especially as they continually change. We were and risk-based approach to regulation, to reduce and the Office of Gas and Electricity Markets (Ofgem). told connecting to the grid can be complicated and the size of the supply licence and reducing reliance It can be found on https://www.gov.uk/ expensive, particularly when the infrastructure on prescriptive rules. This will focus on helping government/publications/energy-sector-cutting- Executive summary needs upgrading. companies to do the right thing, as opposed to red-tape-review The Cutting Red Tape Review went public on 16th waiting for them to get it wrong. “Licence Lite” July 2015 via an online call for evidence. We spoke to d) The scale of change and lack of clear direction is an option introduced by Ofgem that helps new Introduction 35 companies face-to-face and received a further 36 from Ofgem and the Department of Energy and businesses enter the electricity supply market. This report summarises the findings of the Cutting detailed submissions via email and our website. Climate Change (DECC) has led to significant DECC will continue to simplify and standardise the Red Tape review of the energy sector. Companies and trade bodies involved in the energy opportunity costs and lost investment. Businesses reporting processes for Energy Company Obligations sector told us that the most significant burdens in the told us that the scale and process of change is (ECO). DECC is currently collaborating on an HMT This review examines whether legislation and its sector were driven by regulation and enforcement, costly, and largely due to the lack of a joined up led review of the business energy efficiency tax implementation can be simplified or improved to aid which they considered to be overlapping, duplicated, approach between all the bodies in the energy landscape and associated regulations, which sought compliance and to reduce unnecessary burdens on and not specific enough or not designed with sector. We were told that because energy projects the views of industry on simplification through a business. businesses in mind. Smaller companies were take years, and sometimes decades, to complete consultation process. The review, which DECC aims particularly affected by the issues raised as they have longer term vision would help secure investment. to complete by Spring 2016, is considering options This is one of a series of Cutting Red Tape reviews fewer resources and less cash flow to afford the time Businesses told us that they need clear guidance to streamline energy and emissions reporting. that aims to address issues such as overlap and and costs of these burdens. Our key findings from the which can be relied upon so they know they can Additionally, the CMA is currently investigating, duplication between regulators, or to identify stakeholder consultation process are: proceed with projects with greater certainty and as part of its energy market investigation, the instances where the legislation, guidance or the reduced risk. Companies felt that Ofgem’s dual role governance of the Industry Codes and is due to approach to implementing regulations is unclear, a) Sometimes regulation and enforcement of regulator and enforcer was not working. publish its final report in June 2016. These next confusing or unnecessarily burdensome. Each isn’t specific enough, or is designed in a way steps will address the findings in paragraph c.

24 25 PARLIAMENTARY RECORD Select Committee for Science and Technology Smart meter Inquiry. Inquiry announced 18 March 2016.

SELECT COMMITTEES: REPORTS AND INQUIRIES Science and Technology Committee inquiry into smart meters. This inquiry is open, the Committee is still 1st March 2016 – 21st July 2016 accepting submissions. House of Commons On 3rd May 2016 Evidence given by Nick Hunn, Chief Technology Officer, WiFore Consulting Ltd, Pam Conway, Head of Smart Strategy, British Gas, and Dr Sarah J Darby, Environmental Change Institute, Select Committee for Energy and Climate Change University of Oxford; Lord Bourne of Aberystwyth, Parliamentary Under-Secretary of State for Climate Change, Daron Walker, Senior Responsible Owner, Smart Metering Implementation Plan, Department of Energy revolution Inquiry Competition and Market This inquiry is accepting written Energy and Climate Change, and Sacha Deshmukh, Chief Executive, Smart Energy GB. announced 24 March 2016 Authority’s energy market submissions; the deadline is Energy and Climate Change investigation Inquiry announced Monday 22 August 2016. Committee inquiry into disruptive 24 June 2016 Investor confidence in the UK technologies that could change Energy and Climate Change energy sector Inquiry announced Select Committee for Environmental Audit the energy sector. This inquiry Committee inquiry into CMA’s 16 September 2015 is open and accepting written final proposals and their impacts Energy and Climate Change Sustainability and HM Treasury Inquiry announced 18 December 2015 submissions; the deadline for on consumers. Committee held Committee inquiry into the these was May 3 2016, but late a one-off evidence session on factors that contribute to investor Environmental Audit Committee inquiry into the role of HM Treasury in sustainable development and submissions are still being Tuesday 5 July 2016. confidence in the energy sector. environmental protection. considered. This inquiry is open. Evidence was given by Luke On 5th Tuesday July The committee heard from Lord Deben, Chair, Committee on Climate Change and UK new nuclear: status update Watson, Chief Executive Officer, On 28 June 2016 the Committee Inquiry announced 17 March 2016 GB Energy, Gillian Cooper, received a response from the Matthew Bell, Chief Executive, Committee on Climate Change. Then from Matthew Knight, Business Energy and Climate Change Head of Retail Energy Markets, Government. During the public Development Director, Siemens and Barbara Vest, Director of Generation, Energy UK. Finally Estelle Committee inquiry into financing Citizens Advice, Pete Moorey, session with Andrea Leadsom Brachlianoff, Senior Executive, Vice-President UK and Ireland, Veolia, Jerry McLaughlin, Director, Economics new nuclear projects. This inquiry is Head of Campaigns, Which?, MP, Minister of State, Department and Public Affairs, Mineral Products Association and Dan Cooke, Director of Communications and External open and oral evidence is ongoing. Professor Catherine Waddams, of Energy and Climate Change, Affairs/Chairman of Communications Committee, Viridor/Chartered Institution of Wastes Management. Professor of Regulation, Norwich the Chair announced that the 23rd March, The committee heard Business School, and Audrey Committee would be asking the from Dr Simon Taylor, Lecturer in Gallagher, Director of Energy Department for a revised response Energy and Climate Change Committee Finance, Judge Business School, Supply, Energy UK; Martin Cave, which addresses the Committee’s Cambridge University, Peter Member of the Competition and recommendations in more detail. Atherton, Managing Director, Markets Authority energy market Home energy efficiency and demand reduction Jefferies, and Dr Douglas Parr, investigation panel, Competition Low carbon network Fourth Report of Session 2015–16 infrastructure Inquiry announced Chief Scientist and Policy Director, and Markets Authority; Roger 12th March 2016 Greenpeace UK; Vincent de Witcomb, Chair of the Competition 17 September 2015 Rivaz, Chief Executive Officer, and Markets Authority Energy Energy and Climate Change Humphrey Cadoux-Hudson, market investigation panel, Committee inquiry into the UK’s Summary Managing Director, Nuclear New Simeon Thornton, Project electricity infrastructure. Report Build, EDF Energy, Tom Samson, Director, and Susannah Meeke, published 17 June 2016. Awaiting Improving home energy efficiency is a ‘win win’ for households and the UK as a whole. It enhances the UK’s Chief Executive, NuGeneration, Director, Remedies, Business and Government response. Details can energy security, cuts the carbon emissions from our building stock, and reduces costs–the cheapest energy is Zhu Minhong, General Manager Financial Analysis, Competition be seen on subsequent pages. the energy that we don’t use. From the consumer perspective, the benefits include lower energy bills, warmer of International Nuclear Business and Markets Authority. homes that are more comfortable to live in, and improved wellbeing. Insulating draughty homes can also save Development Department, General 2020 renewable heat and vulnerable people from fuel poverty—a problem which remains unacceptably prevalent across the UK. Director of UK Nuclear Projects, Leaving the EU: implications transport targets Inquiry China General Nuclear, and Alan for UK energy policy Inquiry announced 09 March 2016 The Government’s recent efforts to improve household energy efficiency have consisted of supplier announced 07 July 2016 Energy and Climate Change Raymant, Chief Operating Officer, obligations—such as the Energy Company Obligation (ECO)—and the market led ‘pay-as-you-save’ Green Horizon Nuclear Power. Energy and Climate Change Committee inquiry into meeting Committee inquiry into UK’s 2020 renewable heat and Deal. These policies have proved inadequate. ECO has delivered many improvements but at much lower rates 24th May Evidence was given by implications for UK energy policy transport energy targets. This than previous supplier obligation schemes. The Green Deal did not increase demand for energy efficiency Vincent de Rivaz, Chief Executive leaving the EU. This inquiry is inquiry is open and oral evidence significantly and fell far short of original ambitions for the scheme. Beyond well-documented issues around Officer, and Humphrey Cadoux- accepting written submissions; is ongoing. complexity and cost, the Green Deal failed to address the hassle factor that can prevent customers signing up. Hudson, Managing Director, the deadline is Wednesday 14 Nuclear New Build, EDF Energy; September 2016. Pre-legislative scrutiny of the The energy efficiency supply chain has also been affected by inconsistent and unpredictable policy signals Andrea Leadsom MP, Minister of Government’s draft legislation as policies have been chopped and changed. In the last year the Government has announced an end to the State, and Hugo Robson, Chief Leaving the EU: implications for UK on energy Inquiry announced 21 Green Deal and it has reneged on a longstanding commitment to require all new homes to be zero carbon Negotiator, Department of Energy climate policy Inquiry announced 05 January 2016 from 2016 onwards. Sudden policy changes in this area, like other areas of energy policy, have created and Climate Change. July 2016 Energy and Climate Change uncertainty in the market. It is crucial that the Government establishes a stable long term framework for Energy and Climate Change Committee inquiry into pre- energy efficiency. Committee inquiry into implications legislative scrutiny of the proposed for UK climate policy leaving the EU. energy legislation. Report published on May 4th 2016.

26 27 While we welcome the fact that Government has set out plans for the energy efficiency supplier obligation Our principal recommendation is that the Government should set the fifth carbon budget at the level beyond ECO in 2017, we have serious concerns regarding the Department’s proposed approach to tackling recommended by the CCC. Should the Government deviate from the CCC’s advice on the level of the fifth fuel poverty through energy suppliers. The importance of saving people from fuel poverty cannot be carbon budget, we will be looking carefully for a robust evidence-base on any alternative level proposed. overstated, but we heard that the Government’s decision to use the new supplier obligation to do so may be misguided and that we are the only country in Europe to take this approach. Commercial energy suppliers Further recommendations we make include: may not be best placed to reach those households who need it most, and a scheme which places costs on the very households it is designed to help is inherently regressive. Moreover, given the huge number of homes • The fifth carbon budget should include emissions from international shipping, as advised by the CCC. yet to benefit from energy efficiency measures, the reduced ambition of the new supplier obligation is a We also urge the Government to work with international partners to secure an agreed international major disappointment. mechanism for controlling international aviation emissions.

The Government must do much more to reduce consumer energy bills by improving the energy efficiency of • In the light of the climate agreement in Paris, the CCC and the Government must carry out further new and existing homes. Locally-led and area-based approaches have great potential. There are examples analyses as to what levels of emissions reduction may be required in the future to meet the more of good practice across the UK—including in Scotland—that should be drawn on. Zero carbon homes was ambitious goal of limiting global temperature increase to 1.5 degrees Celsius. a positive and ambitious policy, which could have saved future homeowners money on their energy bills. It should be reinstated. Alternatively, the Government should set out a similar policy that will ensure that new • It is important that genuine action takes place in the power sector, not least as electrification of other homes generate no net carbon emissions and are inexpensive to heat and light. The Department must also sectors such as heat and transport becomes more prominent. The Government should set a power sector reinvigorate the ‘able-to-pay’ market. There is now no support to help households who wish to install energy carbon intensity target of 100 gCO2 / kWh for 2030 to provide the investment certainty needed. efficiency measures but cannot meet the costs upfront. DECC should contemplate using the ‘pay-as-you- save’ mechanism, as well as the infrastructure behind the Green Deal Finance Company, when considering • Uncertainties about the UK’s share of the EU Emissions Trading System (ETS) cap for the period of the how to assist ‘able-to-pay’ households in the years ahead. DECC must also seriously look to drive demand by fifth carbon budget result in uncertainties in the share of the budget for the non-traded sectors such as pressing ahead with developing incentives such as the introduction of stamp duty and council tax reductions heat, transport and buildings. We support the CCC’s approach to dealing with the problem, that is to fix for efficient homes. The impact of these ideas must be properly assessed and support mechanisms must be the net carbon budget for the traded sector at 590 MtCO2 e over 2028–2032, thereby limiting emissions in place to protect vulnerable consumers. for the non-traded sector. However this support is conditional on Government clearly explaining how any discrepancies will be dealt with once the UK’s share of the EU ETS cap is known. The Government must promptly demonstrate a renewed commitment to tackling energy efficiency by establishing adequate policies with long-term, ambitious objectives, which restore confidence to the industry. Effectively meeting the Climate Change Act and the commitments made in Paris will require action across the There are a huge number of homes yet to benefit from better energy efficiency. The UK housing stock is board. The Government’s emissions reduction plan, which it said it will publish by the end of the year, will be amongst the least energy efficient in the developed world. If the Government takes concerted action now it can crucial in providing policy certainty across sectors. We will pay close attention to the development of this plan. help to insulate consumers from future energy price rises, while preventing the requirement for widescale We have already set out in recent reports what more Government must do to build investor confidence and retrofits and costly energy efficiency programmes in the future. Success in energy efficiency will only be tackle energy efficiency, and our scrutiny of DECC’s policies in heat and transport is also underway. achieved if a genuinely cross-departmental approach is adopted by Government. All of Government should see taking action on energy efficiency not as a cost today, but as an important investment for the future. The full report may be found on http://www.publications.parliament.uk/pa/cm201516/cmselect/cmenergy/659/659.pdf The full report can be found on http://www.publications.parliament.uk/pa/cm201516/cmselect/cmenergy/552/552.pdf Pre-legislative scrutiny of the Government’s draft legislation on energy Sixth Report of Session 2015–16 Setting the fifth carbon budget 26th April 2016 Fifth Report of Session 2015–16 27th April 2016 Summary

Summary The Government’s draft legislation on energy, as published on 21 January 2016, has the potential to support Ministers in their aim of increasing competition in the energy market and reducing costs for consumers. But The Climate Change Act commits the UK to reducing carbon emissions by at least 80% by 2050, compared it should be amended to ensure that Ofgem and Government are transparent about the costs and benefits to 1990 levels. To meet this target, the UK Government sets carbon budgets, or caps in emissions, for each of the decisions that they make using their powers under the legislation, and that industry is able, where five-year period between 2008 and 2050. The budgets are important stepping stones on the path to 2050 and appropriate, to challenge them. provide the certainty needed for policy decisions and investment to take place. We agree with the proposals to give Ofgem the power to initiate modifications to industry codes in relation The level of four carbon budgets have so far been set in law, covering the period up to 2027. The UK is to next-day switching and half-hourly settlement. The current situation in which only industry can suggest currently on track to meet the first three carbon budgets but there are questions about whether adequate changes does not serve customers as well as it might. But Ofgem’s new powers should be tempered with an policies are in place to meet the emissions reductions needed in the late 2020s under the fourth carbon industry right of appeal to the Competition and Markets Authority on the merits of any code change, and with budget period. As required by the Act, the Secretary of State must set the level of the fifth carbon budget (for the publication by Ofgem of an impact assessment of any proposed alteration. the period from 2028 to 2032) by 30 June 2016. Similarly, we agree in principle with the proposals to introduce competitive tendering for some onshore In November 2015, the Committee on Climate Change (CCC) published its advice on the level of fifth carbon transmission assets, which also have the potential to lower costs for consumers. But, first, there is a budget and recommended that it should be set at 1,765 million metric tons of carbon dioxide equivalent differential impact in Scotland compared with England and Wales, which needs to be addressed to ensure (MtCO2 e), including 40 MtCO2 e emissions from international shipping. The CCC has produced robust that there is a level playing field for transmission projects throughout Great Britain. Secondly, Ofgem should advice that is in line with previous budgets and with the overall trajectory towards meeting the 2050 target. have to publish a project-specific impact assessment when it decides whether and how to tender an asset. And thirdly, the Government should set out how it will ensure the current planning regime in Scotland does

28 29 not prevent or delay the development of competitively tendered projects there. Network companies have generous allowances for early-stage testing of the technological solutions they need, but the UK struggles to bring these innovations into commercial reality. More and more electricity Finally, we agree that the Secretary of State should be granted an extension to her powers so that she can generation occurs at the regional distribution, rather than national transmission level, but Distribution not only continue to oversee the roll-out of the smart-meter programme, but deal with its outcomes. But, Network Operators remain somewhat blind to their energy ﬂows and passive in managing them. There must given the ongoing concerns about whether the roll-out deadline will be met, the Government must ensure be a transition to fully-functional Distribution System Operators which balance and control their local grids. that all those involved in the rollout are clear about their responsibilities and able to deliver on them by 2020. At transmission level, we recommend creating an Independent System Operator (ISO). The Government We urge Members of Parliament to press the Government on this point during the passage of this legislation must set out its intentions regarding an ISO, and consult on a detailed, staged plan for their implementation. through Parliament. Networks are transforming. We recognise that this presents challenges for the Government but it has been slow to present a clear, holistic plan for the evolution networks need. It seems instead to have disconnected The full report can be found on policy ideas at various stages of implementation. We are concerned that the roll-out of smart meters is http://www.publications.parliament.uk/pa/cm201516/cmselect/cmenergy/776/776.pdf not progressing quickly enough to achieve the necessary mass to truly create a smart energy network. Our central message to the Government is that it must address the network system as a whole, learn lessons from policy lags in the key areas we outline, and develop its change readiness so as to meet the ambition of Low carbon network infrastructure low carbon network infrastructure. First Report of Session 2016–17 17th June 2016 The full report may be found on Summary http://www.publications.parliament.uk/pa/cm201617/cmselect/cmenergy/267/267.pdf

Networks are at the heart of the UK’s low carbon ambition. Our inquiry into low carbon network infrastructure has identified that they face three interwoven challenges. Firstly, new energy sources—in The future of carbon capture and storage in the UK: Government Response to the Committee’s Second electricity, gas, and heat—need connections to, and consequent reinforcement of, the grid. Secondly, some Report of Session 2015–16 of these sources are variable in output, such as wind and solar electricity: system operators must therefore First Special Report of Session 2016–17 29 June 2016 employ new tools to balance supply and demand. And thirdly, networks’ efforts to overcome these obstacles must not be impeded by outdated and inflexible regulation and governance. Significant infrastructural On 10 February 2016 the Energy and Climate Change Committee published its Second Report of Session development is needed, but incurs considerable expense of both time and money. Deployment of new 2015–16, Future of carbon capture and storage in the UK (HC 692). On 28 June 2016 the Committee received technologies is crucial to achieving these goals while controlling cost. the Government’s response to the Report.

The recent rise of new connection requests is astounding. For example, the UK’s installed solar capacity Full details can be found on is approaching levels previously expected by 2030, stacking pressure on regional distribution networks. http://www.publications.parliament.uk/pa/cm201617/cmselect/cmenergy/497/497.pdf There is a need for better integration of connection and planning-consent processes. More forward-looking investment by network companies may also be helpful in reversing the slowdown in connections, but Ofgem Setting the fifth carbon budget: Government Response to the Committee’s Fifth Report of Session 2015–16 must assess the best way of recovering costs for such investment. Connection costs remain geographically Second Special Report of Session 2016–17 5 July 2016 skewed. Ofgem should assess the costs and benefits of levelling connection costs across Great Britain. Network charges incurred by consumers also vary considerably by location. Moreover, transmission charges On 27 April 2016 the Energy and Climate Change Committee published its Fifth Report of Session 2015–16, Setting for generators in the UK remain high by EU standards. the fifth carbon budget (HC 659). On June 30 2016 the Committee received the Government’s response to the Report.

The Government must investigate the disadvantage UK generators may consequently face against other This can be seen on http://www.publications.parliament.uk/pa/cm201617/cmselect/cmenergy/518/518.pdf European generators as Great Britain becomes more interconnected. The UK’s gas grid must adjust to unorthodox cleaner fuels. To assist this transition, Ofgem should assess safe levels for injection of green gases into the current network and the Government should set targets for their deployment. We welcome Home energy efﬁciency and demand reduction: Government Response to the Committee’s Fourth Report the Government’s ambitious target for district-heating networks, which are an alternative approach to the of Session 2015–16 electricity and gas networks in providing heat. However, district heating needs a regulatory framework to Third Special Report of Session 2016–17 5 July 2016 encourage investment and complement existing voluntary schemes in safeguarding consumers. On 12 March 2016 the Energy and Climate Change Committee published its Fourth Report of Session 2015–16, Home energy efﬁciency and demand reduction (HC 552). On 4 July 2016 the Committee received the Networks have a number of tools to balance variable energy sources: Government’s response to the Report.

• Storage technologies, from enormous hydroelectric reservoirs to household batteries, can store This can be seen on http://www.publications.parliament.uk/pa/cm201617/cmselect/cmenergy/542/542.pdf electricity at times of peak for use at times of need. However, the deployment of storage is obstructed by archaic regulation and unfair ‘doublecharging’, both of which the Government must address urgently. Pre-legislative scrutiny of the Government’s draft legislation on energy: Government Response to the • Demand Side Response could empower consumers large and small to manage their energy use in line Committee’s Sixth Report of Session 2015–16 with system-wide need, but a more detailed Government strategy is needed to help this solution reach its Fourth Special Report of Session 2016–17 13 July 2016 full potential. • Greater interconnection with European neighbours will improve the UK’s ability to meet peak demand, On 4 May 2016, the Energy and Climate Change Committee published its Sixth Report of Session 2015–16, though we note that Great Britain is likely to remain a net importer of electricity. Pre-legislative scrutiny of the Government’s draft legislation on energy (HC 776). On 12 July 2016, the Committee received the Government response to the Report. • Low carbon network infrastructure. Full details may be found at These challenges can only be met within an appropriate governance, regulatory and operational framework. http://www.publications.parliament.uk/pa/cm201617/cmselect/cmenergy/581/581.pdf

30 31 Scotland’s Energy Policy State Aid Clearance: Scottish Henry Smith (Crawley) (Con) Marion Fellows (Motherwell and Islands Zero-carbon Homes PARLIAMENTARY ORAL Wishaw) (SNP) Mr Alistair Carmichael (Orkney Tom Brake (Carshalton and 11 May 2016 Column: 609 and Shetland) (LD) Wallington) (LD) Mr David Nuttall (Bury North) Aviation Carbon Dioxide QUESTIONS AND DEBATES Energy Questions: (Con) Emissions 12th May 2016 Dr Tania Mathias (Twickenham) Coal-fired Power Stations (Con) 1st March 2016 – 21st July 2016 New Energy Technologies Christina Rees (Neath) (Lab) Modular Power Stations Mark Pawsey (Rugby) (Con) Amanda Milling (Cannock Chase) Bob Blackman (Harrow East) David Mowat (Warrington South) (Con) (Con) Pre-payment Meters House of Commons (Con) Margaret Ferrier (Rutherglen and Renewable Heat Incentive Mary Creagh (Wakefield) (Lab) Diesel Fumes Hamilton West) (SNP) Mary Robinson (Cheadle) (Con) Fiscal Support for Oil and Gas Gas-fired Power Stations: Retail Energy: Switching Michelle Donelan (Chippenham) Jonathan Reynolds (Stalybridge Mr Barry Sheerman Industry Capacity Mechanism Suppliers (Con) and Hyde) (Lab/Co-op) (Huddersfield) (Lab/Co-op) Stuart Blair Donaldson (West Jeremy Lefroy (Stafford) (Con) Jake Berry (Rossendale and John Pugh (Southport) (LD) Dr Alan Whitehead (Southampton, Column: 711 – 716 Aberdeenshire and Kincardine) Callum McCaig (Aberdeen South) Darwen) (Con) Test) (Lab) (SNP) (SNP) Smart Meters Redirection of Investment to renewables 1 March 2016: Column 799 Amanda Milling (Cannock Chase) Oil and Gas Chi Onwurah (Newcastle upon Solar Photovoltaic Systems (Con) Kirsty Blackman (Aberdeen Tyne Central) (Lab) Helen Hayes (Dulwich and West Mike Weir (Angus) (SNP) Community Veto on Clean Energy Mr Dennis Skinner (Bolsover) North) (SNP) Andrew Bridgen (North West Norwood) (Lab) 7 June 2016 Column: 1033 Jeremy Corbyn (Islington North) (Lab) Leicestershire) (Con) Electricity Sector in Northern (Lab) Dr Alan Whitehead (Southampton, Tidal Lagoon Energy Jim Shannon (Strangford) (DUP) Solar Thermal Support 8 March 2016: Column 941 Test) (Lab) Carolyn Harris (Swansea East) (Lab) Tom Brake (Carshalton and Ireland Offshore Wind: Scotland Wallington) (LD) Mr Laurence Robertson Swansea Bay tidal lagoon project Low-carbon Economy Energy Storage Devices John Nicholson (East (Tewkesbury) (Con) Byron Davies (Gower) (Con) Jeff Smith (Manchester, Matthew Pennycook (Greenwich Dunbartonshire) (SNP) Green Research and 8 June 2016 Column: 1171 16 March 2016: Column 944 Withington) (Lab) and Woolwich) (Lab) Callum McCaig (Aberdeen South) Development Tidal Lagoons Mary Creagh (Wakefield) (Lab) Columns: 1733 - 1747 (SNP) Maria Caulfield (Lewes) (Con) CCS Funding (Peterhead) Barry Gardiner (Brent North) Barry Gardiner (Brent North) Neil Parish (Tiverton and Honiton) Clive Lewis (Norwich South) (Lab) (Lab) Topical Questions Electricity Pylons: Sensitive (Lab) (Con) 23 March 2016: Column 1559 Environments Chris Evans (Islwyn) (Lab/Co-op) Zero Emissions Departmental Responsibilities Dr James Davies (Vale of Clwyd) Biomass Heating Industry: 13 July 2016 Column: 281 Energy Questions: Andy Slaughter (Hammersmith) Jeff Smith (Manchester, (Con) Renewable Heat Incentive Ronnie Cowan (Inverclyde) (SNP) 24th March 2016 (Lab) Withington) (Lab) Sue Hayman (Wokingham) (Lab) Energy Questions: David Mowat (Warrington South) Supplier Switch time for 14th July 2016 Oil and Gas: North Sea Indebted Prepayment Customers (Con) Consumers Energy Bills Hannah Bardell (Livingston) Colleen Fletcher (Coventry North Jonathan Reynolds (Stalybridge David Rutley (Macclesfield) (Con) Will Quince (Colchester) (Con) Geothermal Energy (SNP) East) (Lab) and Hyde) (Lab/Co-op) Consumer Boiler Upgrades Margaret Greenwood (Wirral Steve Double (St Austell and Mr Peter Lilley (Hitchin and Liz McInnes (Heywood and Mark Menzies (Fylde) (Con) West) (Lab) Newquay) (Con) Harpenden) (Con) Middleton) (Lab) Fuel Duty Roll out of Smart Meters Andrew Stephenson (Pendle) Alan Brown (Kilmarnock and Column: 695 - 710 Dawn Butler (Brent Central) (Lab) Mr Barry Sheerman Dawn Butler (Brent Central) (Lab) (Con) Loudoun) (SNP) Caroline Flint (Don Valley) (Lab) (Huddersfield) (Lab/Co-op) Reintroduction of zero-carbon Lisa Nandy (Wigan) (Lab) Mr Philip Hollobone (Kettering) Lisa Nandy (Wigan) (Lab) policy for homes Topical Questions (Con) Biomass Rebecca Pow (Taunton Deane) Energy Tariffs Onshore Wind Nigel Adams (Selby and Ainsty) (Con) Andrew Bingham (High Peak) Departmental Responsibilities Energy Infrastructure: Use of Tom Pursglove (Corby) (Con) (Con) Energy Efficiency Measures (Con) Debbie Abrahams (Oldham East British Steel Cat Smith (Lancaster and Rebecca Pow (Taunton Deane) Sir David Amess (Southend West) and Saddleworth) (Lab) Tom Pursglove (Corby) (Con) Fleetwood) (Lab) (Con) (Con) Pre-pay Meters Fracking Locations Christina Rees (Neath) (Lab) Jim Shannon (Strangford) (DUP) Columns: 1748 - 1751 Jessica Morden (Newport East) Michael Tomlinson (Mid Dorset Jeremy Lefroy (Stafford) (Con) Ms Margaret Ritchie (South Shale Gas (Lab) and North Poole) (Con) Margaret Ferrier (Rutherglen and Down) (SDLP) Mr David Nuttall (Bury North) Solar Power Clive Lewis (Norwich South) (Lab) Lisa Nandy (Wigan) (Lab) Hamilton West) (SNP) (Con) Caroline Lucas (Brighton, Liz McInnes (Heywood and Rachael Maskell (York Central) Andrew Stephenson (Pendle) Energy-Saving Products: VAT Pavilion) (Green) Middleton) (Lab) (Lab/Co-op) (Con) Tim Loughton (East Worthing and Renewable Energy: Subsidies Rebecca Long Bailey (Salford and Michelle Donelan (Chippenham) Shoreham) (Con) Jason McCartney (Colne Valley) Eccles) (Lab) (Con) Clive Lewis (Norwich South) (Lab) (Con) 19 April 2016 Column: 771-772 Roll out of Smart Meters

32 33 Energy Market Competition Low Carbon Economy All-Ireland Energy Market Oliver Colvile (Plymouth, Sutton Luke Hall (Thornbury and Yate) Dr Alasdair McDonnell (Belfast and Devonport) (Con) (Con) South) (SDLP) Dr Alan Whitehead (Southampton, Mark Menzies (Fylde) (Con) 20 July 2016 Column: 808 LEGISLATION Test) (Lab) Callum McCaig (Aberdeen South) EU Referendum: Investment in 1st March 2016 – 21st July 2016 (SNP) Power Sector Barry Gardiner (Brent North) Mary Creagh (Wakefield) (Lab) (Lab) Ms Tasmania Ahmed-Sheikh (Ochil and South Perthshire) Government Bills Private Members’ Bills EU Referendum: Climate Change (SNP) Commitments Deidre Brock (Edinburgh North No records Carbon Emission Reductions Bill 2016-17 Paul Blomfield (Sheffield Central) and Leith) (SNP) Baroness Featherstone (Lab) Mr Jim Cunningham (Coventry Energy Tariffs 1st Reading 15th June 2016 House of Lords South) (Lab) Ben Howlett (Bath) (Con) Mr Peter Lilley (Hitchin and 2nd Reading date tba Harpenden) (Con) Security of Electricity Supply David Mowat (Warrington South) Sir David Amess (Southend West) (Con) (Con) Energy Measures (Cost Effectiveness and Richard Graham (Gloucester) (Con) Efficiency) Bill 2016-17 EU Referendum: Policy Lord Foster of Bath Implications Shale Gas Kirstin Oswald (East Antoinette Sandbach (Eddisbury) 1st Reading 14th June 2016 House of Lords Renfrewshire) (SNP) (con) Dr Andrew Murrison (South West Column: 405 - 421 2nd Reading date tba Wiltshire) (Con) Liz Saville Roberts (Dwyfor Topical Questions Meirionnydd) (PC) Departmental Responsibilities Energy Bills Mims Davies (Eastleigh) (Con) Mark Pawsey (Rugby) (Con) Solar Panels The 2015-16 session of Parliament has ended and these Bills will Michelle Donelan (Chippenham) Barry Gardiner (Brent North) (Con) (Lab) make no further progress. Rob Marris (Wolverhampton Fracking at Frodsham Marshes South West) (Lab) Graham Evans (Weaver Vale) Jim Shannon (Strangford) (DUP) (Con) Department of Energy and Climate Change (Abolition) Barry Gardiner (Brent North) Hinckley Point Peter Bone MP (Con, Wellingborough) (Lab) Ben Howlett (Bath) (Con) Pre-payment Meters Commons Smart Meters Sir David Amess (Southend West) Stephen Metcalfe (South Basildon (Con) 1st Reading 29th June 2015 and East Thurrock) (Con) VAT on Energy Craig Williams (Cardiff North) Steve Double (St Austell and (Con) Newquay) (Con) Off-Shore Wind Farm Subsidies (Restriction) Bill 2015-16 Mr Barry Sheerman Vattenfall Review Christopher Chope MP (Con, Christchurch) (Huddersfield) (Lab/Co-op) Margaret Greenwood (Wirral Mr David Hanson (Delyn) (Lab) West) (Lab) Commons Barry Gardiner (Brent North) Gas fired Power Stations (Lab) Christopher Pincher (Tamworth) 1st Reading 6th July 2015 (Con) Retail Energy Market: Switching Capacity Auction Mims Davies (Eastleigh) (Con) Dr Alan Whitehead (Southampton Public Nuisance from Wind Farms (Mandatory Liability Cover) Bill 2015-16 Dr Lisa Cameron (East Kilbride, Test) (Lab) David Davis MP (Con, Haltemprice and Howden) Strathaven and Lesmahagow) Investment Opportunities (SNP) Bob Blackman (Harrow East) Commons (Con) Column 421 - 425 1st Reading 21st July 2015

34 35 36