Clause 84 - Gas and Electricity Markets Authority sustainability duty
Energy Bill [Lords]
8:55 am
Dr Desmond Turner (Brighton, Kemptown, Labour)
Well, the proof of the pudding is in the eating. Those assurances were necessary; they should have been not only given, but backed up. There has been a setback in the growth of renewable energy as a result of NETA; it has only slightly improved. Now we are proposing to extend the benefits of NETA to the whole UK through the British electricity trading and transmission arrangements. It is perfectly logical and sensible to have one electricity market, run according to the same rules and covering the whole of England, Wales and Scotland, but only if the rules are right. I have no confidence that the rules will necessarily be right.
Lest anybody should think that I am trying to pillory the regulator, I assure the Committee that I am not. However, the regulator is acting against his statutory responsibilities, and everything that he does follows from that. To illustrate the point, I cite the proposals for changes in the transmission charge regime that would accompany BETTA. In England and Wales, the National Grid Company charges according to location: the further the generator is from the point of consumption, the higher the transmission charge. However, Scotland operates on the basis of a standard charge, so, irrespective of a generator's distance from a notional site of consumption, the transmission charge is the same. The change will mean that a Scottish generator paying about 0.5p per kWh will pay 2p per kWh.
Think about the impact on renewable generation. Our renewable energy resources that are waiting to be tapped are primarily located off the west coast of Scotland. A renewable generator setting up off the coast of Scotland therefore has not only to face the considerable current problems, but under this system will carry a penalty of 1.5p per kWh, which could kill it stone dead commercially.