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The last set of future oil price assumptions were published alongside the Energy White Paper in May 2007 and can be found in Annexe B of the document titled Updated Energy and Carbon Emissions Projections: the Energy White Paper which can be found using the following link: www.berr.gov.uk/files/file39580.pdf
The oil price assumptions for 2010, 2015 and 2020 outlined in this document are listed in the table below:
| $/per barrel (2006 real prices) | High scenario | Central scenario | Low scenario |
Lord Bradshaw asked Her Majesty's Government:
Whether their forecasts relating to oil prices falling from $65 per barrel in 2006 to $53 per barrel by 2030 remain valid in the light of recent concerns about long-term oil supplies. [HL746]
Lord Jones of Birmingham: The Department for Business, Enterprise and Regulatory Reform does not publish oil price forecasts. It publishes oil, gas and coal future price assumptions for the period till 2020, which are used in the department’s analytical work. In order to capture some of the uncertainty around future oil prices, three different scenarios are presented: a high, central and a low scenario.
12 Dec 2007 : Column WA60
The last set of future oil price assumptions were published alongside the energy White Paper in May 2007 and can be found in Annexe B of the document titled Updated Energy and Carbon Emissions Projections: the Energy White Paper at the following link: www.berr.gov.uk/files/file39580.pdf. The figures mentioned in the question originate from this document.
We keep the future oil prices assumptions under revision and will update them as necessary.
Lord Bradshaw asked Her Majesty's Government:
Whether an increase in the forecast price for oil between now and 2030 strengthens the economic case for further electrification of the railway system and the purchase of electric trains. [HL748]
Lord Bassam of Brighton: An increase in the forecast price for oil is likely to strengthen the economic case for electrification. The extent to which higher oil prices improve the case for electrification depends upon the relative change in diesel and electricity prices and the impact of the oil price increase on the cost of car use, which can influence rail patronage.
Lord Bradshaw asked Her Majesty's Government:
Whether an increase in the forecast price for oil between now and 2030 strengthens the economic case for the use of light rapid transit systems. [HL749]
Lord Bassam of Brighton: Using higher oil price forecasts than previously assumed would be likely to have some impact in improving the economic case for light rapid transit systems and other public transport modes, mainly through the impact on demand. However, this is likely to be relatively modest. The impact will depend on the impact on demand and the trends in energy efficiency and energy sources of motor vehicles and public transport. Updated forecasts will be used in future assessments of light rapid transit systems.
Energy: Renewables
Lord Vinson asked Her Majesty's Government:
How, and at what point, the costs of expansion of the national grid to accommodate expected levels of renewable generation were taken into account in the original regulatory impact assessment for the renewables obligations of England and Wales, Scotland and Northern Ireland, and their subsequent revisions (2001 to present day). [HL235]
The Minister of State, Foreign and Commonwealth Office & Department for Business, Enterprise and Regulatory Reform (Lord Jones of Birmingham): The original RIAs for the RO looked at the cost to consumers of introducing the renewables obligation.
Subsequent RIAs have addressed the marginal additional cost of changes to the administrative processes of the RO. As such they have not addressed the issue of national grid costs.
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Investment in electricity networks is made by the transmission owners and distribution network operators under the regulatory supervision of Ofgem.
Investments will in most cases reflect the cumulative effect of a number of generators of all types seeking to connect.
In terms of investment over the next few years, Ofgem has agreed £560 million of investment in the transmission network specifically to connect new renewable generation in Scotland and the north of England. In the transmission price control, which covers the five-year period from 1 April 2007, a further £3.8 billion of investment in the transmission network was agreed. This figure includes both refurbishment and the costs of connecting new generators of all types and may increase if warranted by generator demand.
Lord Beaumont of Whitley asked Her Majesty's Government:
How many buyouts have been bought by electricity providers since the inception of the renewables obligation, and by whom. [HL268]
Lord Jones of Birmingham: Ofgem publishes annual reports listing suppliers with an obligation under the renewables obligation and whether they presented ROCs or paid the buyout price. A summary can be found below. The reports can be found on the Ofgem website at www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=73&;refer=Sustainability/Environmnt/RenewablObl
| England and Wales | ||||
| Year | No. Suppliers with Obligation | No. Suppliers presenting ROCs | No. Suppliers paying Buyout price | % Compliance |
| Scotland | ||||
| Year | No. Suppliers with Obligation | No. Suppliers presenting ROCs | No. Suppliers paying Buyout Price | % Compliance |
| Northern Ireland | ||||
| Year | No. Suppliers with Obligation | No. Suppliers presenting ROCs | No. Suppliers paying Buyout price | % Compliance |
12 Dec 2007 : Column WA62
Finance: Debt
Lord Barnett asked Her Majesty's Government:
Further to the Written Answer by Lord Davies of Oldham on 22 November (WA 89) on level 3 assets, whether they will provide some examples of an unobservable input. [HL624]
Lord Davies of Oldham: Examples are:
long-dated currency swap—a level 3 input would include interest rates in a specified currency that are not observable and cannot be corroborated by observable market data at commonly quoted intervals or otherwise for substantially the full term of the currency swap. The interest rates in a currency swap are the swap rates calculated from the respective countries' yield curves;three-year option on exchange-traded shares—a level 3 input would include historical volatility, that is, the volatility for the shares derived from the shares' historical prices. Historical volatility typically does not represent current market participant expectations about future volatility, even if it is the only information available to price an option;interest rate swap—a level 3 input would include an adjustment to a mid-market consensus (non-binding) price for the swap developed using data that are not directly observable and that cannot otherwise be corroborated by observable market data;asset retirement obligation at initial recognition—a level 3 input would include expected cash flows (adjusted for risk) developed using the reporting entity's own data if there is no information reasonably available without undue cost and effort that indicates that market participants would use different assumptions. That level 3 input would be used in a present value technique together with other inputs, for example (1) a risk-free interest rate or (2) a credit-adjusted risk-free rate if the effect of the reporting entity's credit standing on the fair value of the liability is reflected in the discount rate rather than in the expected cash flows; andreporting unit—a level 3 input would include a financial forecast (for example, of cash flows or earnings) developed using the reporting entity's own data if there is no information reasonably available without undue cost and effort that indicates that market participants would use different assumptions.| Next Section | Back to Table of Contents | Lords Hansard Home Page |