The Department of Energy and Climate Change has announced a significant investment in energy infrastructure aimed at creating jobs and attracting investors.
Speaking on the initiative, Secretary of state Ed Davey said: “Our reforms will renew our electricity supply, attracting up to £110 billion investment in a mix of clean, secure power and demand reduction, and will support up to 250,000 jobs up and down the supply-chain.”
What’s more, the Capacity Market, which is to be initiated in 2014, is to expected to improve gas and other flexible electricity supply in order to meet future demands and cut risks to security of supply from winter 2018.
This will be achieved by attracting necessary investment in new and existing energy generation, in addition to other forms of capacity such as demand response.
Investment needed in face of power plants closures
The coalition acknowledged that it needed to put huge investment into energy infrastructure, with around a fifth of the UK’s power plants set to close over the next ten years, and more closures scheduled after 2020.
Chief secretary to the treasury Danny Alexander and energy and climate change secretary Edward Davey today announced more details about the reforms.
It is hoped they will give developers and investors the confidence to stop holding back and progress with new projects.
The Energy Bill
Secretary of state Ed Davey underlined that the UK power market is vital to the economy, both in terms of investment opportunity and the scale of the infrastructure challenge.
“The Energy Bill is already progressing well through Parliament and received overwhelming cross-party backing at Commons’ Third Reading.”
Developers and investors have already been clamouring for more details, according to the minister.
He explained that the capacity market is designed to incentivise investment in new gas plants and other flexible capacity in order to maintain an adequate supply margin from 2018 onwards.
“Ofgem and National Grid will consult on possible steps they could take to ensure that mothballed power plant or demand response is available if needed in the middle of the decade,” Mr Davey added.
“This will mean the public can continue to enjoy a reliable supply of electricity.”
Speaking about the introduction of the Strike Prices for renewable technologies, the politician said that these are aiming to make the UK market one of the most attractive for developers of wind, wave, tidal, solar and other renewable technologies. At the same time, costs for consumers will be minimised.
Furthermore, this will help to boost home-grown sources of clean and secure energy, according to the expert. It will also enable the government to decarbonise the power sector, with renewables hoped to contribute more than 30 per cent to the mix by the end of the decade.
“Our reforms will keep the lights on and emissions down, and will save consumers money on their bills. The result – low-carbon, affordable and reliable power for the long term,” Mr Davey said.