Live blog: The UK’s new energy future | Damian Carrington

Chris Huhne sets out how the government thinks the UK can cut the carbon emissions stocking global warming, while keeping the lights on, at a price people can afford • The key questions to be answered 4.49pm: Here’s the motherlode: the several hundred pages of the Electricity market reform white paper from Decc . Enjoy, and let me know what you find. 4.42pm: Final snap from Fiona Harvey before she gets writing the news story: Huhne rejected the claim that the reforms would favour nuclear power. He said no public subsidy would be given to the nuclear industry. However, while this is true, observers have noted that putting a minimum price on carbon would enable nuclear plants to make higher profits by penalising fossil fuel competitors, and the new long term contracts are also likely to favour nuclear power. Huhne has to say nuclear is getting no subsidy for political expediency. But it’s an idiotic position in my opinion . Even the Treasury accepts it gives money to nuclear , and as a windfall for the existing reactors. 4.39pm: More from Fiona Harvey: The cover of the EMR white paper bills it as a plan for “secure, affordable and low carbon electricity”. Note the order in which those words appear. Huhne says he is sending a very positive signal to those who want to build new gas fired power plants. But he also said gas prices going through the roof was cause of people having cardiac arrest over their energy bills. 4.35pm: Fiona Harvey, who has until now been locked in DECC reading the Electricity market reform white paper, emails some early thoughts from the bunker: As Huhne spoke, note how little he mentions climate change and emissions and how often he talks about keeping the lights on. This is the government’s new mantra, to try to counter the critics who rail against green taxes putting energy prices up. 4.29pm: Huhne rolls through the four measures: carbon floor price, capacity payment, emissions performance standard and contracts for difference. Then he adds a fifth: “transitional arrangements to make sure there is no hiatus in investment”. That’s better late than never . Meg Hillier, Labour’s shadow secretary of state for energy and climate change, welcomes the reforms, then teases Huhne for agreeing with his predecessor – Ed Miliband – and about the U-turn on solar feed-in-tariffs. She says Decc is run “on remote control” from the Treasury. Bit unfair that, I think, Huhne’s stood up for green growth and won. 4.26pm: Huhne has started speaking. His opener is that current levels of investment in electricity have to double to total £110bn by 2020. Bills are going up: “We will have to pay to secure clean, low-energy”. But he warns against locking in to high-carbon energy, which would cost more in the long term. 4.06pm: Huhne is having to wait until urgent questions on the Southern Cross care home collapse are answered. In the meantime, my colleague Fiona Harvey notes how Decc have stopped talking about the £200bn that Ofgem estimated was needed in investment in energy infrastructure by 2020. Instead, they have been briefing a figure of £110bn . But the smaller figure is for new electricity generation alone: the larger figure includes all energy infrastructure needed, such as gas and grids. 3.43pm: Energy demand reduction may not get high priority in the white paper, but plenty of people think it’s key. Nick Mabey, Chief Executive of E3G (and businesses too ) say: Making energy demand reduction a priority is a huge and necessary strategic shift. For 20 years the design of the electricity market has effectively blocked investment in the demand side. This has raised costs to consumers and increased our exposure to volatile global energy markets. It’s not easy given that the big six companies that have the closest relationships with consumers all make money from selling energy, not saving it. 3.30pm: Fiona Harvey, who is holed up in the DECC bunker reading the white paper, tells me Huhne’s speech is delayed by 10 minutes. So I have time for this political take from Matthew Spencer, head of the Green Alliance. He says the EMR white paper will be muddled because the government still has not decided on a clear growth strategy. The ” trolls of the treasury ” back deregulation, a war on red tape, and accept plans to cut carbon only on sufferance. Those backing green growth, like Huhne, see smart regulation as opening up the markets of the future . Last year the UK plummeted from 5th to 13th in the clean-tech investor rankings and there is nothing in this week’s energy policy paper that will reverse that trend. Our competitive position will continue to slide until the coalition come to a common view about the role of green growth in the UK’s economic recovery. 3.13pm: Let’s get straight into issue likely to create the most sparks: cost. Chris Huhne says the changes will keep bills lower , yes lower, than they otherwise would be: These reforms will secure our energy future. They will get us off the fossil fuel hook and on to clean, green and secure energy. Crucially, they will keep bills lower than they would be if we stuck with the existing arrangements. Here’s DECC’s workings: If we were to leave the market as it is now, we estimate electricity bills will be around £200 higher in 2030 compared with today’s average annual household bill (about £500). But if we act now – reform the market and get the secure clean energy we need more cost-effectively – we estimate we can limit this increase to £160. This is £40 lower than it would otherwise be. But Consumer Focus, the UK’s statutory consumer champion, is warning that homeowners won’t sign blank cheques : Keeping the lights on and tackling climate change is in consumers’ long term interests. However, consumers can’t be expected to write a blank cheque to decarbonise electricity generation. If today’s policy is to be the least worse option for consumers it needs to be done in the most cost effective way. In order to deliver value for money and minimise the impact on consumers, Government must ensure that: consumers on the lowest incomes are protected; a step change in energy efficiency is delivered; the energy market becomes more competitive. 2.54pm: At 3.30pm today, the UK’s secretary of state for energy and climate change, Chris Huhne, is going to set out how he thinks the nation can meet the three “Cs” of energy in the 21st century: carbon, cost and continuity of supply. The challenge, in other words, is to cut the greenhouse gas emissions that stoke global warming, while keeping the lights on at a price people can afford. It’s the biggest reform in quarter of a century, and will reverse the free market set up by Margaret Thatcher , which has failed to invest for the future. In my preview, I wrote that the government decided long ago that new nuclear power stations are crucial to meeting the “trilemma” of the 3 Cs, and all sides of the debate agree this is the central aim of the complex measures set out in the white paper. The details are pretty technical – contracts for difference and so on – but this piece walks you through the labyrinth . The key questions to be answered are, I think: • What will it cost energy customers? The UK’s creaking energy infrastructure and global fuel prices mean that energy prices are going up whether it’s coal, gas, oil, nuclear or renewables. But the higher the cost, the more hard-pressed consumers will object, making it less likely future ministers will stick to the plans. • Are there incentives for energy efficiency? Crucial, as reducing demand is very often cheaper than increasing supply, to cutting waste will help keep bills down. • Is there help for new entrants to the market? The UK’s big six supply 99% of the energy. Huhne has promised to help break this up, but how? Again it is important for cost: more competition means lower prices. • Which of the UK’s big six energy companies is happy? This will tell you which electricity generation technologies got the best deal. EDF back nuclear, SSE back renewables. • Is there any obligation to build renewables? If not, gas looks an easier, cheaper alternative. I’ll post some thoughts from elsewhere in the run up to Huhne’s speech in the House of Commons . But please let me know your thoughts in the comments below, or via Twitter. I am @dpcarrington . . . Energy Energy bills Energy efficiency Energy industry Energy Nuclear power Coal Gas Gas Damian Carrington guardian.co.uk

Posted by on July 12, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.