Today a series of changes have been set out that will guarantee our long-term energy security. These changes will tackle the legacy of underinvestment and deliver an energy infrastructure fit for the 21st century, the Energy Secretary Amber Rudd has announced. Following a detailed review, a package of reforms to the Capacity Market has been unveiled. They will improve the system used to secure reliable sources of electricity capacity, tackle decades of underinvestment and safeguard the future security of our energy supply for generations to come.
DECC 1st March 2016 read more »
Ministers have been forced to reassure consumers and business that the latest changes to the government’s flagship energy market reforms will deal with any supply problems, illustrating how desperate matters have become. Even if blackouts are unlikely, the UK’s energy sector is in disarray. There’s the closure of power stations with contracts to generate energy. The failure to build new gas-fired plants. The extension of the life of existing nuclear power plants, and doubts over plans for two new reactors. The tumbling oil price which has triggered thousands of job losses. The damages inflicted on the renewable energy sector by abrupt policy reversals. Some of these problems are economic in origin, such as shutting old coal-fired power stations which no longer make a profit, and the failure to build gas-fired power stations when the use of gas as stand-by generation makes its economics tricky. They are also in part created by government policy, however. No part of the energy system is unscathed. And these ructions follow on years of mis-selling scandals and alarm at profit-taking by the “ big six”, which have shaken consumer confidence.
Guardian 1st Mar 2016 read more »
The government has today launched its long-awaited consultation on reforms to the UK’s capacity market, detailing plans to launch the scheme a year earlier than expected. The capacity market offers subsidy payments to power plants that can guarantee the provision of back up capacity over the winter period, in a bid to ensure sufficient capacity remains available as ageing coal and nuclear plants are taken offline and the grid becomes increasingly reliant on variable renewable power supplies.
Business Green 1st March 2016 read more »
Households face paying hundreds of millions of pounds in extra levies on their energy bills, under new plans to ensure Britain has enough power plants to keep the lights on. Amber Rudd, the energy secretary, unveiled plans to overhaul a crucial subsidy scheme that is designed to maintain secure electricity supplies, amid fears it was failing and could leave the UK at risk of blackouts. The “capacity market” scheme is already due to run in winter 2018-19 and 2019-20, when energy firms will be paid almost £1 billion in subsidies each year to guarantee their coal, gas and nuclear power plants will be running. The payments will be funded through levies on energy bills, adding about £10 a year to a typical household electricity bill. The changes unveiled on Tuesday are expected to result in significantly higher subsidies being paid to a greater number of power plants in future years. Analysts say the cost of the scheme could rise by at least 50 per cent and even double – potentially increasing the levy on household bills to £15 or £20 a year.
Telegraph 1st March 2016 read more »
British Energy Minister Amber Rudd has signalled a ‘semi-U-turn’ in energy policy to improve security of supply and to ensure the lights stay on. She said the changes will tackle the’ legacy of under-investment and deliver an energy infrastructure fit for the 21st century.”
Following a detailed review, a package of reforms to the Capacity Market has been unveiled. They will improve the system used to secure reliable sources of electricity capacity, tackle decades of underinvestment and safeguard the future security of our energy supply for generations to come. The reforms set out Govt. plans to buy more electricity capacity and buy it earlier – encouraging more investment in the UK energy system. This will mean new energy infrastructure can be built, in particular new gas fired power stations, safeguarding energy supply and avoiding spikes in energy costs. A review by Rudd’s Department (DECC) conclude that to improve energy margins, get the investment needed in Brtish energy infrastructure and encourage new plant, including new gas, concluded that more capacity should be procured. The exact amount will be determined in due course and procured each year on the basis of a recommendation from National Grid. Rudd added: “We have launched a new consultation that will look at bringing forward the Capacity Market by one year. Under these plans an early Capacity Auction would take place in January 2017 for delivery in winter 2017/18. The consultation also includes details on tougher penalties for companies that fail to deliver their Capacity Market contracts” This consultation will close on 1 April 2016.
Scottish Energy News 2nd March 2016 read more »
Imagine if the government had flipped things round and confirmed its carbon targets for the late 2020s before then reforming the capacity market and clean energy subsidies. The government’s long-awaited capacity market reform proposals are, on balance, good news. Perennial scare-mongering newspaper stories about blackouts may have been wide of the mark for years now, but supply margins have been getting steadily tighter and the government’s deliberate deceleration of quick-to-build renewable energy capacity coupled with its ongoing failure to deliver new nuclear plants means a supply crunch now looks more likely than at any point in the past few decades. If you think certain media outlets and the right wing of the Conservative Party have given the wind and solar sector a rough ride to date imagine the outcry if they were able, however erroneously, to blame renewables for actual blackouts. However, if the proposed capacity market reforms are a step in the right direction they are also yet another victim of the confusion and uncertainty that has been unleashed by the government’s ongoing failure to deliver a truly coherent clean energy strategy. The government’s supposedly cost-effective decarbonisation strategy continues to resemble a game of three dimensional whack-a-mole, with each individual policy action leading to unexpected knock-on impacts at indeterminate points in the future. The capacity market reforms are no exception, once again sparking more questions than they offer answers.
Business Green 1st March 2016 read more »
Plans to keep the lights on without relying on dirty diesel generation were announced by the government yesterday as it brought forward payments to energy companies for committing to supply power. The energy department said that changes to the system would encourage the development of new gas-fired power plants, the lack of which has been one of the key criticisms of the capacity market auction introduced in January last year.
Times 2nd Mar 2016 read more »
FT 1st Mar 2016 read more »