Energy Secretary Chris Huhne today branded the current electricity market framework “not fit to deliver the investment we need”.
And he said the government’s reform of the market would cause a “seismic shift, securing investment in cleaner, greener power”.
Speaking to the CBI’s climate change committee this morning, he said the shortcomings of the market had prompted the government to overhaul it.
“The challenges are huge,” said Mr Huhne. “We must replace a quarter of our old power stations by 2020, largely decarbonise the electricity sector in the 2030s, and prepare for a possible doubling in demand for electricity by 2050.”
He said if “left untouched, the electricity market would allow a new dash for gas, increasing our dependence on a single fuel, and exposing us to volatile prices. It would lock carbon emissions into the system for decades to come.”
He told CBI members that the government had “a once-in-a-generation chance to rebuild our fragmented market, rebuild investor confidence, and rebuild our power stations”.
He added: “Like privatisation before it, this will be a seismic shift, securing investment in cleaner, greener power.”
Mr Huhne also urged the CBI to “get behind the Green Deal”.
“My challenge to you is this: commit to the industries of the future,” he said. “After all, the low-carbon sector is still in its infancy. Its rapid growth – 4% annually – is testament to that.
“Britain accounts for just £112bn of the global trade in low-carbon and environmental goods and services. With our deep reservoirs of engineering and scientific expertise, we can do so much more.
“As we begin to shift towards a new kind of economy, the smart money will be on emerging technologies. So be forward-thinking in your investment decisions.”