To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the (a) implications for his policies of the 2018 National Grid Future Energy Scenarios which place all peak demand scenarios above 75 GW compared with one scenario over 70 GW in the 2017 scenarios and (b) potential effect of the 2018 scenarios on the operations of distribution network companies.
National Grid’s Future Energy Scenarios 2018 has been used to analyse peak demand scenarios for the Capacity Market. The Capacity Market secures the electricity capacity required to meet peak demand in a range of scenarios. The targets for Capacity Market auctions are set annually for the delivery year four and one year ahead. These targets are based on advice from National Grid and our Panel of Technical Experts, which uses the analysis in the Future Energy Scenarios.
With regard to the distribution network companies, Ofgem’s regulation takes account of potential increases in demand. In addition, BEIS and Ofgem published the Smart Systems and Flexibility Plan in July 2017. This signalled the move to Distribution System Operators where network companies are more actively managing their networks to deal with increasing levels of distribution-connected generation and increasing demand from, for example, electric vehicles and heat pumps.