Letter by the Department for Business,
Enterprise and Regulatory Reform (BERR)
I am writing to provide the Committee with further
information on certain points which were raised when I attended
your meeting on 31 January.
ELECTRICITY TRADED
According to estimates made by the Financial
Services Authority, between 1 August 2006 and 31 July 2007 984.8
GWh of electricity were traded.
GAS STORAGE
There are currently nine gas and LNG storage
projects that have already gained consent and are awaiting, or
are in the process of, construction. Completion of these facilities
would lead to an additional 920 Mcm (Million cubic metres) of
gas equivalent of LNG in tank storage, and 1,850 Mcm of underground
gas storage.
With one exception (which is targeting full
capacity in 2018), if these projects proceed according to their
commercial plans they will come online between 2008 and 2015.
This would constitute a 57% increase in UK gas storage by 2015.
There are also a number of projects, some at
a confidential stage prior to public application for planning
permission and some already in the planning system, with the potential
to increase total storage capacity well in excess of this.
DELAYS AT
LNG IMPORT TERMINALS
As the Committee knows, commissioning of both
the Milford Haven LNG import terminals has been delayed into 2008.
As I said to the Committee, my Department's assessment is that
the delays have not had a major impact on our gas supplies and
prices this winter.
EFFECT OF
PRICE RISES
ON NUMBERS
IN FUEL
POVERTY
Energy price rises witnessed in 2008 to date
will clearly result in upward pressure on numbers in fuel poverty.
My department takes this issue very seriously and we recognise
that we need to know the real impact of price movements, taking
into account all significant variables and the distribution of
fuel poor at any one time. My department is revising and improving
its forecasting method for estimating the effect of the most recent
price changes on fuel poverty and will complete this work shortly.
This will enable us to make more confident estimates until we
receive the full results of surveys that allow us to calculate
the authoritative numbers. Given this, I do not want to make any
guesses now about the effects of recent price changes.
FUEL POVERTY
AND DISABILITY
In 2005 there were estimated to be 97,800 households
in England including a disabled person under the age of 60 and
living in fuel poverty.
EU COMPARISONS
Committee members pointed out that a graph which
I presented to was titled inaccurately with respect to its content.
I attach another version of the graph with a detailed breakdown
on domestic retail gas prices across the EU, which gives a clearer
illustration of the point.
I hope this letter provides the information
that you require. I have noted the announcement of your enquiry
into possible anti-competitive behaviour in the UK's energy market.
I and my department are of course ready to assist in any way.
15 February 2008
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