§ Mr. SayeedTo ask the Secretary of State for Trade and Industry what assessment she has made of the effectiveness of the NETA in assisting the suppliers of renewable energy; and if she will make a statement. [16725]
§ Mr. WilsonOn 1 November 2001, I issued a consultation document in response to Ofgem's reports "The New Electricity Trading Arrangements—Review of the First Three Months" and "Report to the DTI on the398W Review of the Initial Impact of NETA on Smaller Generators" of 31 August 2001. I have placed copies of the consultation document in the Libraries of the Houses.
The Government recognise the issues faced by smaller generators, including renewables, under NETA and are committed to ensuring that our renewables targets are not prejudiced. The Government's key proposals are, broadly,
- To ensure imbalance prices are genuinely cost reflective; and
- To ensure that effective consolidation services emerge.
The Government are also inviting views on other proposals put forward by industry.
The Government believe that in some circumstances consolidation services are vital in order to establish and foster smaller generation plant, including assisting suppliers of renewable energy. While consolidation services are now starting to emerge in the market, the Government believe action may be necessary to address the lack of consolidation services to date. The Government have proposed establishing a working group of smaller generators, the National Grid Company, BSC (Balancing and Settlement Code) participants, Ofgem, the DTI and DEFRA to look urgently at possible structural or regulatory obstacles to consolidation, including the likely timescale on which competitive consolidation services will emerge. The Government will ask this group to provide an interim report by 24 December 2001, and a final report by 31 January 2001.
The consultation document is available at www.dti.gov.uk/consultations/. The consultation closes on 1 December 2001.