market base that will allow new partners - and possibly new players - to enter the arena. This will help to ensure there is sufficient momentum in the UK’s development portfolio to meet the challenges of the 2030 targets. It will provide the base for the right investments that, coupled with appropriate measures to drive energy efficiency in homes and businesses, will stand us in good stead to meet the challenges that lie ahead.


Looking at EMR through the prism of the trilemma, and in particular the lens of affordability, causes you to question carefully whether every aspect of the reforms proposed is essential or if there are those which might be viewed as superfluous, and as adding cost unnecessarily.


For example, the package includes proposals to introduce carbon price support, through adding to the existing Climate Change Levy. This is not an incentive but rather another layer of taxation that will inevitably be paid for by the customer. Any increase in the carbon price through this mechanism will be passed through to the electricity wholesale price, meaning that bills will rise and people will be driven towards gas at precisely the point in time when we want to encourage more electrification and a windfall for existing nuclear will be created. Carbon price support will not cut global emissions, as emissions will largely be simply displaced and arise elsewhere under the EU Emissions Trading Scheme. However, UK competitiveness is likely to suffer as against the rest of


Europe, as UK industry bears a charge not borne by its EU competitors. Put simply, this is bad for customers, bad for business, bad for an electric economy and bad for our aspirations for a low carbon future.


Similarly, an Emissions Performance Standard (EPS) is unnecessary. It substantially increases the risks associated with new investments against the background of a power station consenting policy that already prohibits unabated new coal-fired power stations. An EPS requires investors to assess whether the market will fund the investment through the price of carbon (or if not, whether some other policy mechanism will fund the investment required), whether the technology exists or is likely to exist commercially to deliver the EPS, and whether the EPS might subsequently be tightened further. We have always emphasised that an EPS should only be introduced if provision is made alongside it to fund the required investment. We believe that policy should incentivise new low carbon investment rather than act as a constraint on investment.


The consultation also proposes interventions in relation to capacity, with the favoured option being some form of targeted mechanism. We believe that, where possible, energy only markets should be allowed to function and capacity mechanisms should be considered only if there is clear evidence that security of supply is at risk. The consultation does not make that case convincingly.


|92| ENVIRONMENT INDUSTRY MAGAZINE

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156  |  Page 157  |  Page 158  |  Page 159  |  Page 160  |  Page 161  |  Page 162  |  Page 163  |  Page 164