Energy Bill [HL]

My Lords, few movers of an amendment such as this could have had such powerful supporters as the noble Lords, Lord O’Neill, Lord Hannay and Lord Oxburgh. I feel greatly reinforced by the strength of the case which they have made. It would not be wholly unfair if I said that I was a little disappointed by the Minister’s reply. The noble Lord, Lord Hannay, asked whether it would be open to Ofgem in its consultation to come forward with a proposal which said, ““Yes, all right, we will strengthen the balancing mechanism but we also think that there is a case for increasing the amount of storage and that this will require some further measures””. That was a critical question, and I am not sure that I understood the answer. We are talking about future demand and supply over a number of years. I have been provided with a chart, compiled by a consultant, which draws on all the various forecasts of demand for gas. If one looks ahead up to 2025, which is after all only 15 years ahead, one sees that the forecasts vary from a reduction in demand to three-quarters of the present level to an increase of a quarter. Those are huge variations, reflecting the uncertainty with which we are confronted when dealing with supply. We have tended to talk about supply, but the balancing mechanism is essentially a balance between supply and demand. If there is such a wide variation in the estimates made by experts—people who know what they are talking about—we should take that into consideration. Yes, it is true that we have an indigenous supply, which is why our figure would, for the moment, be lower than that in our neighbouring countries—as I indicated in my opening speech. There may also be another Buzzard-type discovery in the North Sea. A recent discovery of gas quite close offshore certainly helped supply here. However, we must be cautious about what we say after the past two winters. Everybody has recognised that the electricity supply has been quite seriously affected by the recession and that the point at which we reach concern has therefore moved three or four years further forward. Why is that not the same for gas? We got through these last winters because there was a considerable measure of operating below capacity, which I hope will not continue. So here is another element of uncertainty. We need to give more consideration to these matters. I shall certainly discuss what the Minister has said with those who have advised me. It may be that the noble Lord, Lord Hannay, is right and that we will get the Ofgem report before we reach the Report stage of this Bill—it looks a little less likely than it did before the weekend, but it is a possibility. We have another energy Bill coming up, which will affect among other things energy prices and the powers of Ofgem, so we may have another opportunity. I shall reflect; I hope that the Minister will do so, too. In the mean time, I beg leave to withdraw the amendment. Amendment 34A withdrawn. Clause 77 agreed. Amendment 34AA Moved by