Wednesday, 3 August 2011

Radical reforms for a “cleaner energy future”

Energy secretary Chris Huhne has ended "25 years of dithering" by outlining radical reforms of the electricity market, reports the Financial Times (paywall).
In the energy white paper, Mr Huhne said the aim was to "build a cleaner energy future" while also replacing "a quarter of our existing power stations" - and fixing a price for low carbon power. Mr Huhne warned of the scale of the "Herculean task ahead", but added there was the potential for "costly blackouts" if nothing is done.
Three central policies were outlined in the paper alter the UK's energy mix in favour of renewables and nuclear power, adds the Financial Times (paywall). First, a new tariff system will offer nuclear power stations and renewable energy sources a fixed price for their electricity -a "contract for difference" - giving investors more certainty. Second, a "capacity mechanism", designed to ensure that power stations are kept on standby to cope with demand surges and the unreliability of wind power. A decision on how to do this has been deferred. Finally, the white paper raises environmental standards for UK power stations.

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