§ Malcolm BruceTo ask the Secretary of State for Trade and Industry if she will make a statement on the ability of the market to respond to the demand for gas in a 1 in 20 winter peak day in(a) winter 2003–04 and (b) each year up to and including 2009–10 should supplies from existing and new development projects fall below maximum levels. [139718]
§ Mr. TimmsEarlier this month my Department and Ofgem published the third report by the Joint Energy Security of Supply Working Group ("JESS"). JESS was set up to assess the risks to the UK's future gas and electricity supplies.
The JESS report highlights both the level of existing potential gas capacity, and the very significant levels of proven, probable and possible future investments over the next 10 years. It identifies a number of potential supply-side developments, including additional import connections with Norway; new LNG import terminals; more interconnection with continental Europe; upgrades to existing interconnectors; and additional gas storage capacity.
The report concludes that the market can respond to the demand for gas in the next decade (including peak gas demand or sustained high demand), by drawing on maximum supplies from existing and proposed new developments, including some of those which at present are less certain.
Meanwhile the recent agreement with the Norwegian Government will facilitate the development of projects that could meet some 20 per cent. of UK gas demand from 2007.
JESS has also been considering demand-side flexibility, including the responsiveness of the market to high prices at periods of high gas demand. Voluntary reductions in consumption by major consumers, if technically and commercially feasible, could play a significant role in balancing the market in such circumstances.
The Government continue to monitor the gas demand and supply situation.