Chris Huhne: UK must invest in energy infrastructure to keep the lights on

Climate secretary unveils a package of far-reaching reforms in the biggest shake-up of the electricity market since privatisation • Follow the day’s events and post your comments here Households and businesses across the UK face a future of power blackouts unless they help to pay for major new investments in the country’s creaking infrastructure, the energy secretary warned on Tuesday. “We have to stop dithering – you can have blackouts or you can have investment. Which do you want?” asked Chris Huhne, unveiling a package of far-reaching reforms in the biggest shake-up of the electricity market since privatisation. He said the UK’s energy infrastructure, from ageing power stations to an outdated grid, was in such poor state that it would cost scores of billions of pounds to overhaul, even without investment in low-carbon generation. Government estimates show the total investment required in both electricity and gas is likely to be £200bn by 2020. The reforms – to come into effect from 2013 – include new long-term contracts for renewable energy generation, a minimum price for carbon emissions from fossil fuel plants, and contracts that encourage companies to help their customers become more energy efficient. Huhne also ushered in a new “dash for gas”, inviting the construction of new gas-fired power stations with a promise that a new ” emissions performance standard ” would be set at a rate that favoured gas but blocked new coal-fired power. He promised this new regulation would not be reviewed until 2015, and any revision would not be retroactive, giving gas companies a clear window for investment. “We are sending a clear signal that we do want new gas,” he said. Some critics have labelled the reforms too expensive, claiming they would add hundreds of pounds in “green taxes” to already stretched consumer energy bills and penalise heavy industry. But Huhne rebuffed claims that investing in greener energy – one of the aims of the reforms, as well as improving the security of electricity supply – would lead to an increase in bills. “I am absolutely convinced that what we are doing is the best possible solution for the British consumer,” he said. Government estimates show that if the reforms are implemented, consumers are likely to see smaller rises in their energy bills in the next two decades than if the current market is allowed to continue. On previous policies, consumers would face an increase of about £200 on a yearly bill by 2030, but because of the reforms, this increase is likely to be limited to £160. Charles Hendry, a Conservative energy minister, backed up his coalition partner. “One of the reasons [the UK has] historically had the lowest prices is that we have not seen the necessary investments in the replacement of new power plants,” he said. Green campaigners are concerned that the UK may be locked into an over-reliance on gas – not least because Huhne himself blamed recent energy bill rises on soaring gas prices. Friends of the Earth pointed out that gas prices have risen 84% since 2004, and domestic energy bills by 90%. Over the same period, the costs of renewables have increased to only about 1% of energy bills. Andy Atkins, executive director, said: “If we keep relying on dirty imported energy and expensive nuclear to power our homes, we’ll all pay the price for years to come.” Others complained that the government had not done enough to break the “stranglehold” of the six biggest energy companies, from which 99% of consumers get their energy. John Sauven, executive director of Greenpeace UK, said: “They have been given a continued licence to pocket rather than save customers money. For millions of consumers, many now living in fuel poverty, this white paper just increased the amount they will have to fork out each year without fundamentally changing the foundations for a shift to an energy efficient and renewable energy economy – the only way customers can in future be protected from the rise in fossil fuel prices.” Energy Green economy Energy bills Consumer affairs Household bills Energy industry Chris Huhne Green politics Fiona Harvey 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.