Huhne sets out 'seismic' plans for electricity market reform
Friday 17 December 2010
Plans to shake up the electricity market and ensure £110bn of infrastructure investment by 2020 were unveiled by the Government yesterday.
Chris Huhne, the Energy Secretary, described the proposals – which include long-term contracts and a carbon price floor – as a "once in a generation" opportunity and a "seismic shift" on the scale of privatisation in the 1980s.
Although domestic power costs are still expected to rise by £160 per household by 2030, the proposals will keep bills 4 per cent lower than they would otherwise have been, Mr Huhne said.
Britain faces a looming energy crunch. By 2020, a quarter of all generating capacity must be replaced and 30 per cent of all electricity will need to be low-carbon, compared with just 7 per cent now.
The way the market currently works encourages suppliers to build low-cost, low-risk, gas power stations. Thereforms aim to address investors' concerns about the long-term payback from low-carbon generation with higher upfront capital costs, such as wind farms and new nuclear power stations.
The most ambitious proposal is for a "feed-in tariff" scheme using contracts for difference (CfD) to create a stable revenue stream for low-carbon generators, although the plan could be pared back to a simpler model if it proves too complex to be workable.
The Government also intends to set an emissions performance standard, ruling out gas power stations not fitted with carbon capture and storage (CCS) technology, and to create a payment mechanism to encourage investment in flexible reserve capacity.
Carbon floor price plans developed by the Treasury offer three separate scenarios ramping up to either £20, £30 or £40 per ton by 2020. The plans will be out for consultation until March, with a view to passing legislation by the end of the year.
- 1 Astrological signs are almost all wrong, as movement of moon and sun throws out zodiac
- 2 Dad eats daughter's weed brownies, thinks he's had a stroke
- 3 The West has it totally wrong on Lee Kuan Yew
- 4 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Germanwings captain Patrick Sondenheimer tried to break into locked cockpit door 'with an axe' as plane was descending
Amanda Knox murder conviction: Italian court overturns verdict for US student and Raffaele Sollecito in the killing of Meredith Kercher
Saudi Arabia says it won't rule out building nuclear weapons
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Germanwings plane crash: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...