Electricity Market Review will need serious response

A new era of energy faces the UK tomorrow when the initial findings of the Electricity Market Review are made public. Decisions made will affect the state of British power […]

A new era of energy faces the UK tomorrow when the initial findings of the Electricity Market Review are made public. Decisions made will affect the state of British power infrastructure and how varied our ‘energy mix’ is likely to be and must be thought out properly said Mr Porter, the Chief Executive of the Association of Electricity Producers.

“The industry needs to make a serious response so the government has the best possible chance of devising a legal and regulatory structure of delivering its ambitions. It doesn’t stop on Thursday. It doesn’t stop in three months,” he said.

Ageing power stations need replacing and EU targets mean the UK is legally obliged to meet targets of 30% renewable power by 2020. This alone makes the market review a difficult area.

Mr Porter said: “The UK has to pick a credible and sustainable approach. Investments in energy tend to be very large. The government has to be candid. As a representative of the Association of Electricity Producers, large and small, fossil to renewable, I’d like to see something that is credible and sets a score of cost-effectiveness. We will be very pleased when this consultation finally emerges, our members want to invest.”

Amongst the issues to be debated on Thursday, perhaps one of the most interesting will be whether the UK government introduces a carbon ‘floor price’. The higher the price the more likely it would be for ‘cleaner’ energies to emerge through the competition. Mr Porter added: “In a perfect world the EU Emissions Trading Scheme would be making it possible to predict a Carbon Floor price well into the future. There is a strong risk of the process leaving us with winners and losers. It is difficult to see a future where energy is cheap any more. Higher bills are inevitable.”

Chris Huhne, Energy Secretary will be announcing the findings of the review to parliament and then begins a three month consultation period with the industry looking for their reponse before the final report is presented in Spring 2011.

ELN will bring you comprehensive coverage of the Electricity Market Review tomorrow

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