Energy and environment policy has rarely been as high-profile as it is now. Decisions taken today will have implications for years to come
'Energy and environment policy has rarely been as high-profile as it is now.' Photo: ALAMY
The recent floods and severe weather
across Britain have brought the debate around climate change back into
sharp focus. While it is not right to attribute individual weather
events to changes in the global climate, the storms were consistent with
the increasingly volatile and extreme weather patterns predicted by
climate scientists.
Later this
month the Intergovernmental Panel on Climate Change is due to confirm
again that global warming is real and that the costs of containing it
will be greater if governments delay taking action.
Meanwhile, unrest in Ukraine also reminds us we should not ignore issues of security of supply.
Successive British Governments have adopted a correct and timely
approach to these issues by balancing the need to cut emissions with the
desire to ensure we all have affordable and secure energy.
In the next few years, Britain needs more than £100bn of investment in
new electricity generation as a quarter of our power stations are phased
out or reach the end of their operating lives. The question is whether
we replace them with carbon-intensive fossil fuel generation that relies
increasingly on imports or with a diverse and secure low carbon energy
mix.
Years of informed debate and policy-making in
Britain means we have a response that is well thought through and
internationally respected. Crucially, the political consensus and
stability of these policies have given investors the confidence to put
their money into Britain.
The issue of providing secure, affordable, clean energy is common to most European countries. Britain’s policy is in sharp contrast to the German experience: German consumers face some of the highest residential electricity costs in Europe and rising emissions from an increased use of coal and lignite. Investors there are also among the losers.
One of the major planks of Government policy here is called the Carbon Floor Price. This is designed to wean the country off an over-reliance on coal and give a strong incentive to us all to cut greenhouse gas emissions.
The mechanism is simple – by setting a rising price for each tonne of carbon dioxide emitted, it penalises polluters and encourages investment in cleaner forms of power.
When it was launched just three years ago, the Government rightly said this was the most cost-effective way to meet our environmental goals as part of a package of policy measures to drive low-carbon investment.
Two things tell us that the policy is working.
First, it is tipping the balance away from coal to lower carbon gas at a time when many relatively modern gas powered stations have been closed or mothballed.
Second, it is encouraging spending on new low-carbon power generation such as wind, biomass and nuclear to give us a more resilient and balanced energy system.
Industry requires competitive energy costs. Some businesses, especially those in energy-intensive industries, have highlighted the cost of carbon pricing on their international competiveness. It is right that this issue is addressed by targeted and specific measures.
Householders are under pressure, too.
Politicians and energy companies have to work together to bear down on costs of energy efficiency schemes without abandoning important environmental goals or damaging investor confidence.
Action taken last December to review the costs of energy company obligation charges were a step in the right direction and more can be done but, of all the environmental measures, the Carbon Floor Price, among a wider set of policies, is the most cost-effective way to cut emissions.
EDF Energy supports the Government’s decarbonisation targets and, together with many business leaders and the CBI, we back the European Union’s target to reduce greenhouse gas emissions by 40pc by 2030.
We are playing our part in meeting the challenge by investing more than £1bn a year in the UK. That means bringing new gas and wind power on stream. It also means we will ensure our coal stations are available to keep the lights on during this period of transition to a lower carbon energy future.
Last year, EDF Energy and the Government concluded a deal for power from the first new nuclear power station in a generation at Hinkley Point in Somerset. It will be ready just as the first of our existing low-carbon nuclear stations is coming to the end of its life. It will provide a massive boost to the economy and rebuild the British nuclear industry.
As the agreement is part of this far-reaching reform of the UK energy market, it is right that the European Commission should examine the deal.
We are encouraged by the pace of the Commission inquiry. The consultation period will show that the contract for Hinkley Point C is fair and balanced for investors and consumers.
In the meantime, our investments to extend the lives of our 15 existing nuclear reactors by around two years will delay the crunch point when electricity demand and supply converge. This has bought the country some much-needed breathing space but it has not changed the fundamentals.
That’s why the Government must send a strong signal that it remains committed to its long-term energy policies, even if it makes short-term and temporary adjustments to them. Although there may be a short postponement of the energy gap, there is no such respite available on climate change.
Energy and environment policy has rarely been as high-profile as it is now. Decisions taken today will have implications for years to come. We have the right policies in place. Now we must deliver them in the most cost-effective way possible.
Vincent de Rivaz is the chief executive of EDF Energy
http://www.telegraph.co.uk/finance/comment/10701663/Britain-has-the-right-energy-policies-in-place-it-just-needs-to-keep-the-costs-down.html
The issue of providing secure, affordable, clean energy is common to most European countries. Britain’s policy is in sharp contrast to the German experience: German consumers face some of the highest residential electricity costs in Europe and rising emissions from an increased use of coal and lignite. Investors there are also among the losers.
One of the major planks of Government policy here is called the Carbon Floor Price. This is designed to wean the country off an over-reliance on coal and give a strong incentive to us all to cut greenhouse gas emissions.
The mechanism is simple – by setting a rising price for each tonne of carbon dioxide emitted, it penalises polluters and encourages investment in cleaner forms of power.
When it was launched just three years ago, the Government rightly said this was the most cost-effective way to meet our environmental goals as part of a package of policy measures to drive low-carbon investment.
Two things tell us that the policy is working.
First, it is tipping the balance away from coal to lower carbon gas at a time when many relatively modern gas powered stations have been closed or mothballed.
Second, it is encouraging spending on new low-carbon power generation such as wind, biomass and nuclear to give us a more resilient and balanced energy system.
Industry requires competitive energy costs. Some businesses, especially those in energy-intensive industries, have highlighted the cost of carbon pricing on their international competiveness. It is right that this issue is addressed by targeted and specific measures.
Householders are under pressure, too.
Politicians and energy companies have to work together to bear down on costs of energy efficiency schemes without abandoning important environmental goals or damaging investor confidence.
Action taken last December to review the costs of energy company obligation charges were a step in the right direction and more can be done but, of all the environmental measures, the Carbon Floor Price, among a wider set of policies, is the most cost-effective way to cut emissions.
EDF Energy supports the Government’s decarbonisation targets and, together with many business leaders and the CBI, we back the European Union’s target to reduce greenhouse gas emissions by 40pc by 2030.
We are playing our part in meeting the challenge by investing more than £1bn a year in the UK. That means bringing new gas and wind power on stream. It also means we will ensure our coal stations are available to keep the lights on during this period of transition to a lower carbon energy future.
Last year, EDF Energy and the Government concluded a deal for power from the first new nuclear power station in a generation at Hinkley Point in Somerset. It will be ready just as the first of our existing low-carbon nuclear stations is coming to the end of its life. It will provide a massive boost to the economy and rebuild the British nuclear industry.
As the agreement is part of this far-reaching reform of the UK energy market, it is right that the European Commission should examine the deal.
We are encouraged by the pace of the Commission inquiry. The consultation period will show that the contract for Hinkley Point C is fair and balanced for investors and consumers.
In the meantime, our investments to extend the lives of our 15 existing nuclear reactors by around two years will delay the crunch point when electricity demand and supply converge. This has bought the country some much-needed breathing space but it has not changed the fundamentals.
That’s why the Government must send a strong signal that it remains committed to its long-term energy policies, even if it makes short-term and temporary adjustments to them. Although there may be a short postponement of the energy gap, there is no such respite available on climate change.
Energy and environment policy has rarely been as high-profile as it is now. Decisions taken today will have implications for years to come. We have the right policies in place. Now we must deliver them in the most cost-effective way possible.
Vincent de Rivaz is the chief executive of EDF Energy
http://www.telegraph.co.uk/finance/comment/10701663/Britain-has-the-right-energy-policies-in-place-it-just-needs-to-keep-the-costs-down.html
