Energy: Prices

Energy and Climate Change written question – answered on 21st July 2014.

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Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy)

To ask the Secretary of State for Energy and Climate Change what proportion of energy costs paid by the consumer will be attributable to the capacity market in each year between 2016 and 2026.

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

The Government published its latest Impact Assessment on the Capacity Market in June 2014.1 This shows that the impact of the capacity market is estimated to be an increase in the average annual domestic electricity bill of £2 (or 0.3%) over the period 2016-30 (in 2012 prices). In percentage terms, the impacts on non-domestic bills are of similar magnitude. The impacts on electricity bills for individual years are uncertain but Table 7 of the Impact Assessment sets out the impact for each five-year period from 2011 to 2030.

We will shortly be publishing updated Capacity Market analysis, including revised household bill impacts, to take account of the decision of the Secretary of State for Energy and Climate Change, Mr Davey, on the amount of capacity to procure in the first delivery year (2018-19). We do not expect this change to have a material impact on the costs to consumers.

1 Available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/324430/Final_Capacity_Market_Impact_Assessment.pdf

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