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UK energy companies want to set decarbonisation target

The ‘vast majority’ of UK energy companies want to set targets to decarbonise the UK electricity market, says Ed Davey

Ed DaveyFacing questions from a panel of MPs regarding the upcoming Energy Bill, Mr Davey, the energy and climate change secretary, said only one or two companies didn’t want such a target, although he refused to name them.

The Energy Bill famously managed to avoid the issue of setting a carbon target, pushing the decision on what our carbon emission target for 2030 will look like  back to 2016 for the next government to deal with.

The absence of such a target has raised the ire of a number of MPs, most notably the former environment minister Tim Yeo.

Mr Yeo favours a shift to renewable energy encouraged by clear carbon targets. Speaking last year he said:

“Lumbering the economy with a centralised power system largely reliant on gas would be like running an office using a fax machine in the age of the iPad,”

The Energy Bill is currently under committee scrutiny, with a third-reading likely in May according to the Guardian, leaving open the possibility of amendments.

  • Tony Day

    It would be interesting to know precisely which electricity generating companies do want a decarbonisation target in order to be able to force HMG to provide consumer funded guaranteed electricity prices under the Contracts for Differences scheme.

    I recently attended a conference on CfD’s for CCS at which it gradually became clear that the real motivating force behind many of the arguments was that proponents of ‘clean’ energy wanted to use Electricity Market Reform as a method of avoiding having to compete to ‘dispatch’ electricity on demand on the one hand, but still to obtain the benefit of ‘dispatchable’ fossil fuel generation largely being a self-hedging investment on the other hand.

    Wind of course does not have to compete to dispatch, as its use is obligatory. If the cost of ocal is under-written by a combination of CfD’s, and market price setting when dispatching, or by Capacity payments when not dispatching, and nuclear receives generous CfD’s for base load, there is a high risk that competition in the electricity market will virtually disappear.

    Of course this is attractive to the electricity companies. Pity about the consumer and tax payer, ie us. It is a good thing that UK’s far larger gas market will remain competitive.