Government 'to fix limits for power plant carbon'

Ed Davey, the Energy Secretary, gave a strong indication yesterday that he plans to introduce a specific emissions target for the power sector as he seeks to attract much-needed investment into low-carbon electricity generation.

In a speech about the Government's forthcoming Energy Bill, Mr Davey acknowledged the pressing need for potential investors to be clear about the financial returns from backing projects if Britain is to attract the £110bn of capital the sector needs over the next eight years.

He said a key way to give investors clarity on returns would be to introduce a "decarbonisation target" for the power industry, putting a limit on how much Co2 energy generators could emit, thereby increasing demand for low-carbon technologies such as wind, solar, water and nuclear.

"I believe a strong case has been made by many investors in energy infrastructure for a decarbonisation target range for the power sector. Such a range would help make clear our continued commitment to our climate goals," Mr Davey added.

Britain has a legal obligation to reduce carbon emissions by 80 per cent by 2050. The specific target for the power industry is expected to be between 50g and 100g of Co2 per kWh by 2030, with the final level kept flexible to see how the low-carbon industry progresses. The target is designed to help Britain hit its overall emissions target as well as attract low-carbon investment. Mr Davey stopped short of promising the bill, due next month, would detail a new decarbonisation target. But if this does not make it into the bill it could be implemented later.