The trade body that represents more than 80 suppliers and generators of energy in the UK is supporting the phasing out of coal-fired power stations.
Energy UK’s CEO Lawrence Slade added the organisation will start campaigning for low carbon alternatives for the shift towards a low carbon economy.
He believes the UK should have its own version of Germany’s ‘Energiewende’, which is the country’s plan to move to using a majority of renewable energy sources.
In a new Pathways to 2030 policy document, he stated plans to remove all coal from the system by 2025 “will leave room for lower carbon fuels like new gas, biomass and wind to play a greater role in a flexible energy system”.
The news is a major U-turn for the energy lobbying group which has historically been regarded as a supporter of fossil fuels.
Mr Slade added the power industry understands “it will bear the bulk of the heavy-lifting” in order to meet binding decarbonisation targets and “there will be significant costs in terms of new investment”.
He also believes the energy system is moving to a more decentralised model, with “strong roles for wind, solar and storage”.
He said: “We have the opportunity to see advancing technologies take up more of the mix – including storage, solar, wind and tidal.”
Mr Slade added: “The UK’s power sector is poised to make a real contribution to the country’s ongoing energy challenges. Working with government to develop a holistic approach to policy and long term policies that underpin the economic confidence of investors, the UK energy industry can deliver affordable reliable and clean energy now and into the future. But the energy sector cannot meet the country’s green goals alone and we are looking at ways to work with other industry sectors.
“We are already seeing new reliable and renewable sources of energy coming on stream while working with customers will continue to drive innovation putting power in the hands of users to deliver warmer and more energy efficient homes.”
The report, which is based on a series of in-depth interviews with companies across the UK energy sector in August and September last year, suggested electricity storage is widely regarded as “the single most important technological breakthrough” likely to happen in the next 15 years.
It added the technology will be a complete “game changer” in the way the power system operates.
Almost all participants “argued strongly” for the government to take a more holistic “whole systems” approach to energy policy.
They also believe it is essential for cost-effective energy efficiency to be delivered to ensure “maximum benefit is reached from low carbon heat” and argued for greater certainty over the policy framework.
The report stated: “Many respondents believed long lead time regulation should be employed going forward, i.e. implementing building and product efficiency standards and allowing the market to deliver in the most efficient manner. Respondents compared this to the use of efficiency standards for boilers and vehicle, and believed similar standards should be applied for both domestic (new build and retrofit) and industrial/commercial building stock.”
It is also calling on the government to deliver a “credible and reliable” carbon price through a reformed EU Emissions Trading System while in the meantime setting out a “clear and stable trajectory for the Carbon Price Floor post-2020 in consultation with industry”.