Previous Section Index Home Page

12 Dec 2005 : Column 1664W—continued

Energy Market Liberalisation

Miss McIntosh: To ask the Secretary of State for Trade and Industry if he will make a statement on liberalisation of the energy market in the EU. [34644]

Malcolm Wicks: At the Energy Council on 1 December, the Commission presented two reports—DG TREN's Report on progress in creating the internal gas and electricity market" (Council Document 14800/05) and DG Competition's Energy Sector Inquiry: Issues Paper"—on the further development of the internal energy market and possible structural barriers to competition within this sector. These were hard hitting and outlined serious deficiencies in the market. The Council agreed on the need for more work on implementing existing legislation and on releasing more information.

The Council also unanimously agreed that secure supplies of electricity and gas, delivered on open, transparent and liberalised markets, are crucial for Europe's competitiveness.

I am grateful for the commitment to further action given by the Commission at the Council. We will support proposals that help to accelerate the development of the internal market and, separately, expect the Commission to take early enforcement action against any who are acting against the interests of consumers.

Energy Policy

Adam Afriyie: To ask the Secretary of State for Trade and Industry if he will make a statement on the Government's energy (a) policy and (b) review; and when the review will be completed. [34167]

Malcolm Wicks: A written statement on the Energy Review was set before the House on 29 November 2005, Official Report, columns 12–13WS. The statement contained the Review Terms of Reference, which stated that we aim to bring forward proposals on energy policy next year.

The review team will report to my right hon. Friends the Prime Minister and the Secretary of State for Trade and Industry in early summer.
12 Dec 2005 : Column 1665W

Energy Review

Mr. Jenkin: To ask the Secretary of State for Trade and Industry whether the Energy Review will consider (a) the (i) level and (ii) targeting of research and development funding in the energy sector and (b) the role of (A) Government and (B) Ofgem in ensuring (1)security of supply, (2) affordable energy and (3)progress towards environmental targets. [34183]

Malcolm Wicks [holding answer 2 December 2005]: As the terms of reference of the review make clear, the Review is focussed on policy measures to help us deliver our objectives beyond 2010—to maintain secure energy supplies, to tackle fuel poverty, to reduce carbon emissions and to promote competitive markets. It will consider a wide range of options, including the role of current generating technologies and new and emerging technologies. We believe that Ofgem as an independent economic regulator is central to the competitive operation of UK energy markets.

Norman Baker: To ask the Secretary of State for Trade and Industry pursuant to the written statement on the Energy Review of 29 November 2005, Official Report, columns 10–12WS, if he will list the membership of the review team; and which Department each works for. [36054]

Malcolm Wicks [holding answer 8 December 2005]: Iwill lead the Energy Review, which will be taken forward by a cross-departmental team.

The review team will be based in DTI, with secondees from DEFRA, Department for Transport, HM Treasury and the Prime Minister's Strategy Unit. In addition there will be input from ODPM and FCO.

The devolved Administrations and territorial Departments are already involved and will continue to be involved throughout the course of the review.

Energy Supplies

Mr. Hoyle: To ask the Secretary of State for Trade and Industry what percentage of total energy supply he expects (a) fossil fuels, (b) renewables and (c) nuclear to supply by (i) 2020, (ii) 2040 and (iii) 2060. [35525]

Malcolm Wicks [holding answer 7 December 2005]: The following table shows the DTI's November 2004 projection of percentage shares of fuels in the future energy supply mix for 2020. There are significant margins of uncertainty attached to such estimates. Estimates are not available for later years. Work to update projections is currently under way.


Peter Law: To ask the Secretary of State for Trade and Industry what cost-benefit analyses have been undertaken on different strategies to secure sufficient energy for the United Kingdom without increasing greenhouse gas emissions. [35841]

12 Dec 2005 : Column 1666W

Malcolm Wicks: The 2003 Energy White Paper published the results of extensive modelling of the costs of different options for reducing carbon dioxide emissions over the period to 2050. The analysis is available at:

In November 2005 my right hon. Friend the Prime Minister announced that there would be a review of energy policy which would report in summer 2006. This will involve further analysis of the costs of different options for meeting the Government's long-term targets for reducing carbon dioxide emissions.

Fuel Demand

Mr. Holloway: To ask the Secretary of State for Trade and Industry what steps he is taking to provide for an increase in demand for fuel. [33630]

Malcolm Wicks: I understand that the question pertains to heating oils. My Officials are in regular contact with operators in the UK oil industry to monitor market developments and to help ensure that they are best able to meet increased demand for heating oil during the winter.

Although production and refining capacity is still tight by historical standards, conditions in the global oil market have eased since prices spiked in the aftermath of hurricanes Katrina and Rita. This has allowed oil and oil product stocks to build in both Europe and the US and left the market better able to cope with higher demand in the winter.

Gas Prices

Jonathan Shaw: To ask the Secretary of State for Trade and Industry what assessment he has made of the price differentials between (a) gas spot and (b) forward prices and the impact upon energy intensive users; and if he will make a statement. [33895]

Malcolm Wicks: The price differentials for the last three months are given in the table.
Average price inSpot
(p per therm)
Forward price for contract in quarter 4, 2005 (p per therm)Forward price for contract in quarter 1, 2006 (p per therm)

n/a=Not applicable
That the forward contract for quarter 4, 2005 was not available after September 2005.

The choice of the type of contract to enter into is a commercial decision to be made by each firm, within the context of their own risk management strategy and balancing a number of factors.

Spot prices for November were volatile and rose, in part, due to nervousness about a tight winter supply demand balance. The Government understand that this creates tough trading conditions for energy intensive users. We will continue to work closely with industry to help, wherever possible, to mitigate the situation and
12 Dec 2005 : Column 1667W
reduce the impact on industrial customers, particularly large users. We are in close contact with high-energy users who have been affected by the price increases.

The recent price spike has not had an impact on all of industry. For example, for the less energy intensive users contracts with suppliers may be on a fixed price basis which are lower than the EU average.

Heat Pumps (Grants)

Mr. Laurence Robertson: To ask the Secretary of State for Trade and Industry what grants are available for the replacement of old boilers with ground source heat pump systems; what the average grant awarded is; and if he will make a statement. [35070]

Malcolm Wicks: Under the Clear Skies Programme grants of £1,200, regardless of system size, are available for the installation of ground source heat pumps.

Next Section Index Home Page