Combined Cycle Gas Technology (Hansard, 25 March 1991)

§ 17. Mr. Pike
To ask the Secretary of State for Energy whether he has discussed with the Director-General of Ofgas the sale of gas for generation of electricity using combined cycle gas technology.

§ Mr. Wakeham
Yes, Sir.

§ Mr. Pike
When the Secretary of State met Ofgas, did he discuss the maximum proportion of electricity that should be generated by PowerGen and National Power? If not, does it mean that the Government have no policy on the best use of our energy resources?

§ Mr. Wakeham
Government policy is to have diverse sources of supply so that, so far as possible, we can move to a point at which they all pay their proper economic cost. Generators can then decide which fuel to use in the best interests of their business.

§ Mr. Beaumont-Dark
British Gas is increasing its prices because it says that it is losing £250 million due to bad weather. It seems to think that it can insist on doing that when it loses money due to problems of bad weather, good weather or lack of industry. If private industry could have things so easy, it could earn riches beyond the dreams of the Pharoahs. Can we not stop this kind of nonsense in nationalised industries which have become private cornucopias?

§ Mr. Wakeham
Since becoming privatised, British Gas has a good record of keeping consumer prices down. The role of Ofgas is to be welcomed. There is a supply problem in terms of gas for the generation of electricity, and the company could have become over-committed on previously scheduled prices. I understand that the problem 601 relates to 1993–94. I welcome the efforts being made by British Gas and Ofgas to find a solution which offers a positive future for independent gas-fired generation. That is the right way forward and I am hopeful that a solution will be found.

§ Mr. Barron
The 35 per cent. increase in British Gas prices to industrial generators has implications for the long-term supply of gas to domestic users and raises a number of questions. Does the Secretary of State think that it is right for the Government to talk about the need for a diversity of supply and that the matter should be left to the market? We want to know how domestic consumers will be provided with gas in the not-too-distant future if the burning of gas for electricity generation takes off in the way that the right hon. Gentleman wishes.

§ Mr. Wakeham
As the hon. Gentleman well knows, not much gas will be burnt at prices that are 35 per cent. higher than before. We shall have to see how negotiations proceed. British Gas is not the only source of power station gas. Some projects have already obtained supplies direct from producers, and I hope that others will also do so.