HL Deb 14 July 1999 vol 604 cc332-3

2.54 p.m.

Lord Ezra asked Her Majesty's Government:

What progress is being made in the review of electricity trading arrangements.

Lord McIntosh of Haringey

My Lords, the review of the electricity trading arrangements is being led by the DTI and the Office of Gas and Electricity Markets. We expect to publish a consultation document at the end of July which will contain details of the proposed new market. Final proposals will be published in the autumn. Legislation to implement the new trading arrangements will be brought forward as soon as parliamentary time permits.

Lord Ezra

My Lords, I thank the Minister for that Answer. Will he accept that the changes proposed in the electricity market will surpass in their extent and complexity the changes which were introduced during the privatisation of electricity and could therefore affect everyone in this country? Will he further accept that many problems are as yet unresolved; for example, in the case of combined heat and power and renewable energy, in which I declare and interest, the present arrangements would definitely be prejudicial? I know that those matters are under consideration. Has the Minister anything to announce as regards their resolution?

Secondly, and more importantly, will he accept that the new arrangements will require major new computer networks at national system level and at the level of the generating and supply companies? I am sure that he hardly needs to be reminded that the combination of new computer systems at the same time as the introduction of massive new procedures can be a lethal combination. Will the Minister assure the House that, before the arrangements are introduced, the Government will conduct complete cost-benefit and risk analyses, publish them and have them fully debated?

Lord McIntosh of Haringey

My Lords, it almost sounds as though the noble Lord is asking me to delay decisions rather than, as is more common, to speed them up. He is right that the issues are complex. We must look after the security of supply, price transparency, sufficiently liquid markets, the impact on combined heat and power and renewables, and the impact on the non-fossil fuel obligations. All those issues have been considered over recent months and will be considered during the consultation period.

As regards IT, the noble Lord is again right. It would be most unwise to implement other changes at the same time as devising a new IT system. On the other hand, the IT system that is necessary is basically a trading system, and plenty of examples are already available.

Lord Geddes

My Lords, will the Minister ensure that in the review in question, the whole subject of net metering is investigated in considerable depth, whereby those individuals who currently produce electricity—presently primarily through the use of photovoltaics—are paid the same sum per unit as they pay?

Lord McIntosh of Haringey

My Lords, I understand that that is an additional complication. On the other hand, anyone who seeks to preserve any aspect of the pool operation which we have had for the past nine years, and which was an absurd and perverse result of the way in which privatisation was carried out, needs to think very carefully.

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