Evidence presented by Lord Hunt of King's Heath - Department of Energy and Climate
Ms Lorraine Hamid - Department of Energy of Climate Change
Mr John Overton - Department of Energy and Climate Change

Q394 Mr. Dave Anderson: For ten years Ofgem has been trying to get this to happen and the industry has basically said at first it was not even a problem; it did not accept there was a problem. What will happen if the Government has to intervene and the industry does not agree with the way ahead?

Lord Hunt of Kings Heath: Of course, we have taken powers to intervene under the Energy Act. I do not think that our powers to intervene are in doubt.

Q395 Mr. Dave Anderson: No, but what happens after that, I am asking you, if they say, "We do not agree with the process you are putting in place"?

Lord Hunt of Kings Heath: In the end of course, Government will have to do what it has to do. Clearly, we are always subject to JR, and no doubt we would have to take our chances on that. Coming back to your original point, you will know that there is a huge queue at the moment. I think over 60 gigawatts are in the queue, and some dates have been given as late as 2023. Given the imperative is to make sure that we have a grid that is fit for purpose that is unacceptable. Clearly, we have to ensure that we have a much better process. The interim connector management is at least allowing for some very early, quick connections; so hopefully we are dealing with some of the immediate problems.

Q396 Colin Challen: I wonder whether you are painting too black-and-white a picture of what the Government ought to be doing. You talk about not dictating and not micro-managing, but the challenge you face is that about 35 per cent of our electricity should be renewable if we are to meet our 2020 targets. That is in ten years, and we are still talking about writing scenarios and so on: would it not be good if the Government showed it was going to intervene a bit more? I wonder whether these scenarios show different levels of Government intervention, and what the pros and cons of those different levels of intervention would be.

Lord Hunt of Kings Heath: I would rather not anticipate the work we are doing in relation to both the renewable energy strategy but also the summer strategy. The scenarios are looking at energy requirement and a possible mix. I think you are right to pose the question. Am I painting too black a picture in the sense that it is either being laid as completely hands-off or hugely interventionist. I hope I was not doing that, and if I have suggested it, let me correct that. I do think that Government has to intervene and make sure that the grid is fit for purpose. If you have a real problem of queuing in a way that is unacceptable, then we have to ensure that changes are made. Our preference, for the reasons we have already intimated, is for industry and Ofgem to come to a satisfactory resolution. As long as we are prepared to intervene, as I have said we would, I think that is the right signal. We would want to ensure as far as possible that people could sign up to it without reaching the situation that Mr Anderson has suggested, in terms of the companies having outright opposition, and we would want to consult extensively. I think that Government intervention can be relatively benign, given that parties are prepared to play ball; but, if not, in the end we will have to.

Q397 Mr. Dave Anderson: They have not so far, have they? The fact that for ten years it is not an issue, and now all of a sudden it quite clearly is an issue, does not give you much confidence! It does not give me much confidence.

Lord Hunt of Kings Heath: I would want to give you the confidence that I am determined that we will sort this out. We have to sort it out. As Mr Challen has said, moving from the amount of renewable energy we have now to the amount required in 2020 is a huge challenge. It is not only the grid, but there are many other issues that we have to face up to.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.

Promoted by Paul Foy on behalf of Dave Anderson, both of St Cuthbert's Church Hall, Shibdon Road, Blaydon, NE21 5PT