Photo of John Hemming

John Hemming (Birmingham, Yardley, Liberal Democrat)

To ask the Secretary of State for Trade and Industry what contingency plans are in place to deal with a possible shortage of natural gas during the winter of 2005–06; and what significant methods are available, in addition to limiting electricity generation, to reduce natural gas consumption.

Photo of Malcolm Wicks

Malcolm Wicks (Minister for energy, Department of Trade and Industry; Croydon North, Labour)

In the first instance the Government would expect demand for gas to reduce itself in response to price signals indicating tightness in the balance between supply and demand in the gas market. This has already been observed in previous winters, mostly from electricity generation but also, to a lesser extent, from large industrial users of gas. The scope for additional demand reduction from this sector was explored in a report, Estimation of Industrial Buyers' Potential Demand Response to Short Periods of High Gas & Electricity Prices: A report to the DTI and Ofgem by Global Insight", which is available from the DTI website under

http://www.dti.gov.uk/energy/publications/policy/index.shtml

The Government and Ofgem have been working with large industrial users to encourage the provision of more timely and easily accessible information to help market participants to identify commercial opportunities for such demand-side response.

In the extremely unlikely event of the situation deteriorating to the point where the market is no longer able to balance itself, powers to restrict gas supply are available to the national emergency co-ordinator at National Grid and to my right hon. Friend the Secretary of State under applicable legislation.

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