HC Deb 12 July 1996 vol 281 c320W
Mr. Alan W. Williams

To ask the President of the Board of Trade what has been the change in real terms since privatisation in industrial electricity and industrial gas prices; and what estimate the DTI energy model has provided about the effect of these changes on consumption levels. [36815]

Mr. Eggar

Between privatisation—in the second quarter of 1990—and the first quarter of 1996 industrial electricity prices have fallen by 10.5 per cent. in real terms. Industrial gas prices fell by 55 per cent. in real terms between privatisation—in the fourth quarter of 1986—and the first quarter of 1996.

The DTI energy model estimates that in the short run, industrial energy demand is relatively unresponsive to changes in energy prices. In the longer term, for every 10 per cent. fall in energy prices, total energy demand is estimated to rise by around 4 per cent.

However, the price responsiveness of energy demand varies significantly across industrial sectors and types of fuel. For example, industrial electricity demand is estimated to be more price responsive than industrial gas demand.

Energy prices are just one of the many influences on energy demand and recent changes in demand for electricity and, particularly, gas will be affected by developments in technology and availability of supplies as well as prices.