16/01/2009
AEP statement on conservatives low-carbon policy announcement
Commenting on the Conservative’s low-carbon policy announcement today, David Porter, Chief Executive of the Association of Electricity Producers, said:
“We agree with much in the Conservative's report. Electricity companies are already committed to achieving a low-carbon electricity mix and are investing in new gas-fired power stations and a variety of renewables technologies to that end. Large companies also want to build new clean coal and nuclear power stations in order to maintain a balanced portfolio and avoid becoming over-dependent on one fuel or technology. We are working with all political parties to ensure the low-carbon vision becomes a reality and look forward to discussing their vision with the Conservatives.
Investment in electricity generation
‘I would have liked to hear something more supportive about investment to avoid the looming generation gap. Huge investments in electricity generation are now becoming urgent if we want to avoid a capacity gap in the middle of the next decade. Around £14bn investment are currently under consideration, and an additional £8bn are vested in projects that have already secured planning permissions. Investors need to make some big decisions, to get new plant built and keep the lights on in the UK. All parties need to remember that when they make energy policy announcements.
Renewables
‘We are relieved that the Conservatives are now fully supportive of the Renewables Obligation (RO) to bring forward renewable electricity. Feed-in tariffs can help small-scale domestic renewables projects, but for larger projects, there is already a well-established support system in place, the RO. The RO has led to a significant increase in renewable electricity, from 2.2% in 2002 up to over 5% today. At least a further £6.5bn worth of renewable energy projects are currently at various stages of development and more are planned. Proposing to replace or curtail the RO would have destabilised the market and could lead to delays in investment.
Carbon Capture and Storage
‘Mandating Carbon Capture and Storage Technology before it is proven at an industrial scale is the wrong approach. We need to demonstrate CCS successfully before it can be deployed on a large scale. The proposed extension of support for CCS is helpful, but if it is linked to mandatory emission standards, as seems to be the proposal, the required number of projects might not come forward. Carbon emissions are already capped under the EU Emissions Trading Scheme. Within the scheme, the overall emissions cap is gradually reduced and companies have to make commercial decisions on how to stay within those limits – whether by using CCS or in other ways.
Smart grids
‘We welcome the ambitious plans for developing smart grids. More power stations will be developed at the smaller distribution level and the interactions between the national grid, local networks and consumers will become multidirectional. We believe that a strong central network will still be necessary, for example to transport wind energy from Scotland to demand centres in England.”
Contact
Laura Schmidt, Communications Executive, 020 7747 2922 or 07981719009
Notes
The Association of Electricity Producers (AEP) represents large, medium and small companies accounting for more than 95% of the UK generating capacity, together with a number of businesses that provide equipment and services to the generating industry. Between them, the members embrace all of the generating technologies used commercially in the UK, from coal, gas and nuclear power, to a wide range of renewable energies. Members will undertake many of the investments that will be needed over the next decade to replace ageing power stations and create a low-carbon electricity mix.