Here’s what Boris Johnson needs to do about energy. A new energy policy should be at the heart of his vision for Britain outside Europe, but it is going to be expensive. One of his first decisions after July 23 could be to accept the recommendations of a long-awaited government White Paper aimed at overhauling the energy industry. The document – likely to outline root-and-branch reforms to new nuclear funding and flesh out green energy policies empowering consumers – was due to be published ahead of the summer recess of Parliament. Expectations for what will actually be contained in the White Paper are high. Carolyn Fairbairn, director general of the Confederation of British Industry, wrote to Business Secretary Greg Clark last month urging him to ensure it meets the long-term needs of cleaning up the environment, while keeping the lights on. It is unclear if both objectives are even possible. To achieve this, a new model for nuclear funding will be essential. The near £20bn bill for building the Hinkley Point C power station and the terms offered to developer EDF and its Chinese partner are rightly controversial. The government has guaranteed a fixed price for the plant’s electricity. Hinkley’s strike price today stands at £102 per megawatt hour, versus a S&P Global Platts Analytics’ forecast of £57.30 per megawatt hour for 2025 – when the plant is due to start. This level of subsidy has set an unaffordable precedent for funding future reactors and is political dynamite unless it is addressed somehow in the White Paper. Another ruinously expensive net-zero tech being bandied about is carbon capture and storage. The technology to suck emissions from industrial processes and store them underground in old oil and gas fields is commercial suicide without significant subsidies, or sky-high carbon prices. The industry itself agrees carbon would have to trade at around €60 (£53) per ton of CO2 captured, compared with today’s European cost of carbon set at around €28 per ton. Energy and clean growth minister Claire Perry has committed the government to getting its first large-scale carbon capture project running by the middle of the next decade. But the government’s budget is minuscule, with just £20m to be spent on CCS technologies at industrial sites and £315m for decarbonising facilities. Without a long-term increase in funding, further initiatives to reduce industrial emissions could flounder.
Telegraph 19th July 2019 read more »