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The government is set to outline radical reforms of the UK's electricity market, with measures it claims will save consumers money over the next two decades.
Energy secretary Chris Huhne is set to publish the white paper on electricity market reform, warning that the present system is not fit to deliver the kind of investments that are needed to reduce carbon and keep electricity bills down.
The government estimates that more than £110bn of investment is needed in electricity generation, with a greater focus on low-carbon technology.
A key recommendation is expected to be long-term price contracts with domestic nuclear power plants and offshore windfarms, in a bid to make electricity prices more stable.
However, the reforms are set to prove controversial, with concerns the proposals will add costs to consumer energy bills.
And some have argued that planned "contracts for difference" could contain a hidden subsidy for nuclear power.
The Department of Energy and Climate Change (DECC) says its plans to reform the market would end up costing consumers £160 per household a year by 2030.
However, should no investments be made, then capacity limitations would see bills rise by £200 a year over the same period.
Later in a statement to MPs, the energy secretary will say that renewable energy sources, such as solar energy and marine power will be essential in meeting UK targets on climate change.
The government aims to increase the share UK electricty produced by renewables to 15 per cent by 2020, up from the current 7 per cent.
The energy secretary said the measures will provide "an insurance" for consumers against price shocks and accused previous governments of "far too much dithering for far too long" on investment.
Writing in the Daily Telegraph, Huhne said: "Together, these reforms will secure our energy future.
"They will get us off the fossil fuel hook and on to clean, green and secure energy. Crucially, they will keep bills lower than they would be if we stuck with the existing arrangements."
Article Comments
Committing to a 110 billion pound programme is risky in any industry.
However, when you add in that consumers energy costs will have to go up in the short term for them to come down in the long term, then you realise just how hazardous a venture the government's energy generation investment is. It's true that the UK's energy infrastructure is aging and a move towards renewable energy is required. The execution of this ambitious programme therefore has to be nothing less than clinical, or errors will happen, delays will occur and even more costs will accrue. This will not go down well with a public who has seen an initial hike in bills.
The organisations responsible for carrying this out need to ensure they have full visibility and control of their operations in order to avoid these unnecessary delays on site. The good news is that a sophisticated approach to the use of mobile photography can provide substantial benefits to a process such as this. Construction teams, fitters and gangs can now quickly photograph any issue they may encounter, and have it automatically uploaded, with contextual information, to a website. This brings visual intelligence to Head Office, so they can quickly decide on the best course of action and avoid the all-too-common aborting of jobs. It brings a level of control and has a significant impact on the level of quality of work. If this programme is to succeed, and not bring further expense to the British public, these are the kinds of issues that need to be addressed now.
Andy Hutt, CEO, www.triopsis.com
Andy Hutt, CEO, triOpsis
14th Jul 2011 at 12:15 pm
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