Business Secretary Greg Clark has today declared that the electricity ‘trilemma’ – the competing tension between the cost, security and carbon impact of energy – is “coming to an end” thanks to rapid reductions in the cost of clean power. Clark this afternoon delivered what had been billed as a major speech as part of the government’s response to the Cost of Energy Review published last year by Professor Dieter Helm. Clark said “cheap power is now green power…The policy dilemma known as the trilemma is coming to an end”. The controversial Helm Review had concluded energy prices were being pushed up by years of government policymaking distorting the market and shackling consumers with hefty legacy costs. It called for a radical simplification of the energy policy landscape to allow market forces to find the most cost-efficient route for delivering decarbonisation. During his speech Clark broadly welcomed the review’s analysis, but stopped short of announcing sweeping reforms to the current energy policy framework. He did, however, set out a suite of fresh principles to govern his department’s approach to the energy sector and announced plans for a new Energy Bill next year. Clark said the government’s new philosophy includes provisions for businesses to have more control over the market, but, where necessary, for government to be prepared to intervene on issues of insurance and optionality. He also announced a series of regulatory reviews to make the market’s complex system of rules more “agile”, allow new technologies to flourish and drive greater competition across energy networks. And in a boost to the carbon capture industry, he promised that the UK would develop a new Carbon Capture, Utilisation and Storage (CCUS) strategy to deliver mass deployment of the technology from 2030, dependant on the success of cost reduction efforts. Clark also used the speech to confirm the department is looking at alternative nuclear financing options, including the government taking a stake in new nuclear projects. As it stands the government’s plans to develop a fleet of new large-scale nuclear power stations are looking shaky following Toshiba’s decision to wind down NuGen, the UK-based nuclear business leading on the Moorside nuclear project. In response to the speech Nick Molho, Executive Director at the Aldersgate Group, said Clark’s new principles give “a better sense of the government’s long-term energy policy direction” but more is needed to boost prospects for green power deployment. “If the UK is to have an affordable and low carbon power system, the government’s upcoming policy paper needs to tackle how cheap and mature forms of renewable energy can have a route to market, how interconnection links with the EU will continue to grow after Brexit, what the carbon price trajectory will look like in the 2020s and how large consumers of electricity can be rewarded for providing flexibility services to the grid,” he said.
Business Green 15th Nov 2018 read more »