Press Release
Financing the new energy mix
13 June 2012
The Nuclear Industry Association has today published a new briefing paper on electricity market reform.
No-one is saying it won't cost money to replace our ageing energy infrastructure, whether it's with solar, coal, wind, nuclear or clean coal. To maintain our quality of life, and to keep powering our schools, hospitals and industries, there is a price tag attached for the new generation we need. Of course it is right that government seeks to keep costs down for the tax payer and the consumer. Costs need to be stable and affordable. That's why we need the new Energy Bill and electricity market reform.
Although important details remain to be ironed out we believe that, in principle, the governments reforms will create a package that could provide investors with the certainty they need to proceed with the construction of new low carbon plant. Importantly it will also provide security of supply and long term price stability for consumers, protecting them from volatile fossil fuel prices. We would expect electricity bills after the implementation of EMR to be, on average, lower than they would have been in the period up to 2030.
SCALE OF THE CHALLENGE
The UK needs 60GW of new electricity generating capacity and associated infrastructure by 2025. The government has indicated this would be 35GW from renewables and 25GW from thermal, predominately nuclear (up to 16GW). Government estimate that £110 billion of investment in generation infrastructure is needed over the next 10 years. The Climate Change Committee (CCC) has recommended that if the UK is to meet its emissions targets the power sector be almost completely decarbonised by 2030 with 30-40GW of new low carbon plant added to the grid.
SUMMARY
Therefore, the six key goals driving UK energy policy are:
1. Affordability. Costs for new secure and reliable energy generation need to be manageable against a backdrop of enormous uncertainties.
2. Investment. Long term revenue stability for investors, enabling financing and reduced capital costs.
3. Stability. Long term price stability for consumers.
4. Security. The UK needs home grown energy to reduce dependence on foreign oil and gas.
5. Clean. The new energy mix needs to be low carbon.
6. Swift. The ageing UK energy infrastructure is past its sell by date and needs to be replaced now.
For more detail on these six drivers, please see briefing paper below;
http://www.dodsmonitoring.com/downloads/Misc_Files/briefing_paper_12_06_12.pdf
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