Lord Hunt of Kings Heath (Lab)

My Lords, I am grateful to the noble Lord, Lord Offord, for his general support for what is proposed in these regulations and for his specific questions in relation to the implications for long-term energy security and whether there is a risk of stagnating the market. He also asked whether we are going to keep this under regular review. I should start by saying that the capacity market has been operating since 2014 and has worked pretty well. I acknowledge that. We see no reason why we cannot continue with it. In a sense, the permanent nature of the system that the noble Lord referred to is a perfectly reasonable response to the fact that the system is tried and tested. I should also say that it has supported investment in just under 19 gigawatts of new-build flexible capacity, including low-carbon technologies, since its introduction. That is solid evidence to suggest that the system can deliver the capacity needed to meet future peak demand and respond to the kind of challenge that he raised about introducing low-carbon technology into the frame as older capacity starts to be replaced. I take the noble Lord’s point about keeping this under review. We absolutely are going to keep this under regular review. We have to do so. That is so important. We are committed to ensuring that the right policy tools are in place for delivering the secure and affordable energy system we need. I can confirm to the noble Lord that we regularly assess the performance of the capacity market and explore improvements to the scheme. We do not hesitate to bring to your Lordships’ House and the other place further changes in relation to further statutory instruments. This is all intended to improve security of supply. We believe that accelerating investment in low-carbon technologies can increase the role they play in the capacity market. Our evidence since 2014 suggests that the mechanism that we have put in place is going to work. I am quite confident that we are right to say that this should be a permanent feature. Having said that, I thank the noble Lord for his constructive response to this SI.