Today’s electricity market reforms have won the backing of the Committee on Climate Change.
Chief executive David Kennedy said the ‘four pillars’ unveiled by Chris Huhne this afternoon “should bring forward required investments in clean power generation technologies over the next two decades, and limit price impacts for consumers”.
The CCC’s recent report on the Fourth Carbon Budget recommended that the power sector be almost completely decarbonised by 2030, with 30-40 giga-watts of new low-carbon plant added to the grid by then.
Mr Kennedy added that within today’s package, “the key reform is the introduction of long term contracts for low carbon capacity”.
He said: “These would provide confidence to investors and reduce financing costs. There are questions of detail around contract and market design which will need to be resolved over the next months.
“But the basic model proposed is in our view the right one to transform the electricity sector in a way consistent with meeting carbon budgets, enhancing security of supply, and maintaining affordability.”