31/08/2009
David Porter comments on alleged power shortages
David Porter, Chief Executive of the Association of Electricity Producers (AEP represents over 90% of the UK's electricity production) said:
'It is true that a large part of the UK's generating capacity has to be replaced. Some of it is simply too old and other plant cannot meet ever-tightening EU air quality standards that apply from 2015. To replace this and address the climate change agenda, companies have to invest around £100 billion in the next 10 years and more in the following decade. No one should under-estimate how challenging this is. It is absolutely vital that the UK should be an attractive place for investment in energy. Investment will have to come from the global market. The money will go where public policy is stable and a respectable return can be earned. With that in mind, it was worrying to see the report by "Consumer Focus", last week, calling for cuts in retail energy prices. Note too that the regulator Ofgem, wrote this month to energy retailers also inferring that there may be scope for reductions. In May, however, its own analysis showed that there was little, if any, profit in the energy retail sector and recently, two energy companies reported substantial reductions in half-yearly profits across their UK operations.
'Rest assured, the UK electricity industry wants to keep the lights on. It would have been building highly efficient new coal-fired plant by now, but, the climate change lobby touched a government nerve and put a stop to new coal without stringent conditions on carbon capture - new technology that cannot be implemented quickly. New nuclear power is planned, but 2017 is about the earliest that it can be completed. Renewable energy and new gas-fired power stations should be developed and by 2017, energy efficiency will be better than it is today.
'There is time to get more plant built and avoid the risk of power shortages - a new gas-fired station can be built in two or three years. But, we must have the right climate for investment and agreement on the fundamentals between the main political parties. Unfortunately for a capital-intensive, long-term industry, we are in a potentially volatile period of politics, with an election up to nine months away. Just as important, of course, is that we have a business-like planning system that delivers rational and timely decisions, otherwise the best intentions will come to nothing.
ENDS
Contact:
Rachel Hunter
Communications Executive
Tel: 020 7930 9390
Direct: 020 7747 2922