Coalition’s energy plans given lukewarm reception

ELN spoke to some experts from the range of energy industries to talk about various issues outlined in the policy document. Changes to power generation is a major plank of […]

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By Sumit Bose

ELN spoke to some experts from the range of energy industries to talk about various issues outlined in the policy document.

Changes to power generation is a major plank of the new strategy, from increasing the levels of energy from renewable sources to investing in more carbon capture and storage (CCS) for four coal powered stations. There are also plans to fully establish feed-in tariffs, introduce a floor price for carbon trading, a green bank and introduce an offshore electricity grid.

David Porter, chief executive of the Association of Electricity Producers said the government had to be clear: “To meet our targets on renewable energy and secure electricity supplies, the UK needs about £200bn investment in energy infrastructure in the next decade. This must be encouraged by clear, decisive policy. Companies want to invest in a variety of generation technologies to contribute towards a low carbon economy. It is important that risks to investment decisions are mitigated to ensure that the lights stay on in the next decade.”

Leonie Greene of the Renewable Energy Association said: “On the positive side, the increase in renewable energy targets shows strong political commitment but where we’re concerned is in the detail. We have worries over the plans for FITs [feed-in tariffs] and Renewables Obligation Certificates. We also want to know who will invest in the offshore electricity grid and more than ever we need details on the Renewable Heat Incentive.”

The decision to introduce emissions performance standards that will prevent anymore coal powered stations being built unless that have CCS is one of the most controversial ideas.

Stuart Oliver from the confederation of UK coal producers, COALPRO, said: “This is really a matter for the generators, but the coal industry will continue to campaign for a balanced energy policy where coal sits alongside nuclear, renewables and oil and gas to meet our needs.

“One thing is for sure: coal provides about 30% of Britain’s electricity and it will continue to do so, without it we’d be barely able to meet our power needs.”

David Porter urged caution too: “An EPS for coal fired power stations with CCS is not as straightforward as it sounds. CCS is an emerging technology and if energy companies find that they are required to meet an emission standard that is either technically impossible or commercially uneconomic, investment will not go ahead.”

And that investment could be in doubt according to some in the business world. Charles Yates, associate director at accountancy and consultancy giant Grant Thornton, commented: “There is little evidence of hard choices being made and areas of priority being identified. The only deadline for action is the reduction of central government carbon emissions by 10% within 12 months.

“Until the new policies are more specific, uncertainty will undermine the confidence required for the private sector to invest the tens of billions that the UK’s energy sector needs.”