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UK power reform proposals criticised by MPs
- 12 years ago (2011-05-20)
- Junior Isles
UK MPs have criticised the government’s current power market reforms and cast doubt on their ability to deliver enough investment for improved energy infrastructure, in a climate change committee report.
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Current proposals, by energy secretary Chris Huhne, for a new policy approach aimed at raising £110 billion of power investment in the next 10 years, have been branded as “over-complex” and questions have been raised as to the credibility of them returning sufficient capital investment.
The new programme’s focus on feed-in tariffs, the deployment of which have themselves been widely criticised, was damned as more suited to encouraging industrial scale nuclear and biomass, not renewables, claimed the report.
“The government’s ‘one- size-fits-all’ approach will fail to bring forward the low-carbon investment we need. The model of contracts proposed may be appropriate for some generators, such as nuclear and biomass, but could increase costs and risks for intermittent generators such as wind and technologies like carbon capture and storage and electricity storage,” the report read.
The report instead argued that, “alternative kinds of long-term contracts should be designed for other kinds of low-carbon generation”. It further encouraged the government to, “create an independent expert institution to design these contracts as soon as possible”.
Some of the committee’s criticism has focused on the perception that the tariff policy has been dictated by the coalition agreement to avoid public subsidy of nuclear and the Liberal Democrats general distaste for nuclear energy, rather than a basis in environmental or economic reality.
MP’s further asserted that the wholesale energy market should be opened up, and barriers to entry reduced. The proposed reforms, they said, were unfortunately not suited to producing this kind of contestability or threaten the oligopoly of the UK’s ‘Big Six’ utility giants. They also warned that these companies would be unlikely to provide the necessary £200 billion of investment the country would need to meet its energy commitments for the next decade.
The Department of Energy and Climate Change responded: “The government’s position that there will be no specific subsidy for nuclear is absolutely clear. Electricity market reform will provide support to all forms of low-carbon generation, not just nuclear, and that will enable the shift to a low carbon economy.”
It also reassured MPs that the committee’s findings would be studied closely before parliament’s summer recess.