May 22, 2012

Britain Cleans Up With Power Reforms

Michael Crumbliss for RedOrbit.com

Britain made a large step toward new rules to reduce carbon emissions and protect consumers from high prices for electricity.

Edward Davey, Secretary of State for Energy and Climate Change confirmed that the government will follow last year´s proposed plan and guarantee a minimum price to low-carbon energy producers. Nuclear power is included and will provide backup for intermittent renewable energy.

Davey said the goal is to, “ensure security of supply for the long-term, reduce the volatility of energy bills by reducing our reliance on imported gas and oil, and meet our climate change goals by largely decarbonizing the power sector during the 2030´s.”

Power bills will go up, given the estimated 200 billion pounds of investment needed to accomplish these goals.  Thus, the government has set limits on rates to protect consumers, limiting power bill raises to 100 pounds by 2030.

Problems with the power supply are imminent as 15% of old and dirty plants are closed by 2015, with more to close by 2020. The government intends to encourage investment in clean power plants by guaranteeing a minimum price for renewable and nuclear power, with tailored solutions for each type of power plant.

In addition a price will be placed on carbon in April of next year. The price will be 16 pounds per ton of CO2, rising to 30 pounds in 2020, and 70 pounds in 2030. A maximum level of CO2 emission for fossil fuel plants will be set. The new rules also pay owners of backup plants, mainly those running on natural gas that can switch on and off quickly to balance renewables such as wind and solar.

Not everyone is pleased with the new rules as they encourage nuclear power and do not put a limit on gas plants. Some fear there will be a rush for gas plants. Gas is far cleaner than coal but is not a true answer to pollution problems.

Catherine Mitchell, professor of energy policy at Exeter University, told BBC News: "This legislation is really sad - in more than 20 years of studying energy I have never known so many people so horrified."

"Originally, four to five years ago, we looked to be heading for a sustainable energy policy but then the nuclear lobby came in and civil servants weren't able to resist. It's unbelievable that we will be tying ourselves in for maybe 40 years to a technology that will produce power at two to three times the wholesale cost."

"With that kind of money we should be looking at new technologies, smart solutions. Other countries in Europe have recognized that - I'm not sure why we've failed."

Energy Secretary Ed Davey told BBC Radio 4's Today Program: "Let's be clear, there is no blank check for nuclear as there used to be in the past. There used to be a political imperative originally tied to the nuclear weapons program and then to political agendas."

"We don't have that now - unless nuclear can be price competitive, as the industry says it can be, unless it can be price competitive, these nuclear projects won't proceed."

But some will see this as a bargaining ploy to negotiate down the price of new nuclear rather than a genuine acceptance that there is a price beyond which nuclear should not go.


On the Net: