The Carbon Trust responds to the Department of Energy and Climate Change's publication of draft Energy Bill on Tuesday 22 May 2012.
Electricity market reform is critical to ensure that our carbon and energy security objectives are met over the coming years. Providing a stable and long term price for low carbon energy is essential to provide investors with the confidence needed to support the £110bn of new capital investment required this decade. The big opportunity is to get the market reform right through introducing Contracts for Difference and achieving technology cost reduction over time. Targeted innovation programmes can help significantly ensuring we deliver low carbon electricity at the lowest cost to the consumer and also help us generate a significant new industry that can create economic value for the UK. For example we have the potential to drive down the cost of offshore wind by a quarter by 2020, grow an export market and create up to 200,000 jobs. The inclusion of an Emissions Performance Standard is a big step forward in constraining the growth of the UK's carbon footprint, although it does not yet go far enough to meet future needs. The UK cannot meet its carbon targets with unabated gas plants operating as late as 2045, as is now proposed. To meet our carbon targets, the UK will need to remain on track to decarbonise the electricity sector by around 2030. That will require equipping any new and existing gas power plants with carbon capture and storage technology by this time and ramping up deployment of a number of other low carbon technologies.
Simon Retallack, Strategy Manager at the Carbon Trust
For more information download the draft Energy Bill (PDF).