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Energy Bill - ‘rigged’ for nuclear

23 May 2012

The government’s new draft Energy Bill, launched on 22 May, is a big chance to move the UK towards an energy-efficient economy powered by renewable energy. But we’re worried that the electricity market reform (EMR) process has been designed too much to incentivise new nuclear, at the expense of other low-carbon technologies - despite clear evidence that the costs of nuclear power are soaring.

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Nick Molho, head of our energy & climate team, says: “As made clear by the Committee on Climate Change, decarbonising the UK's power sector by 2030 is an absolute necessity if we’re to stand any chance of meeting our legally binding commitments on cutting carbon emissions. The Energy Bill gives the UK government a unique opportunity to do just that.

“The government must state a clear ambition for renewable energy in the UK beyond 2020, and provide financial support mechanisms that are specifically designed for the renewables sector. As it is, it looks like the process has been rigged for nuclear."

Here’s the main problem. Because each of the low-carbon technologies - be it renewables, carbon capture (CCS) or nuclear – is very different, and are all at varying stages of maturity, it wouldn’t work for them all to rely on the same financial support mechanisms. A one-size-fits-all approach just doesn’t work in the energy sector.

Instead, we believe the Energy Bill needs to provide clear and targeted support for renewables.

As Nick Molho says: "Given the increasing concerns about the economic viability of new nuclear and the repeated delays to the CCS demonstration programme, renewable energy and energy efficiency are our best bets to deliver a secure, cost-effective and low-carbon power sector by 2030.

“But renewable energy investors need clear, unequivocal, long-term support from ministers, who must face down sniping from the backbenches and certain sections of the media.

”And the Energy Bill shouldn't be just about incentivising low-carbon generation. It should place just as much importance on encouraging reductions in electricity demand through energy efficiency.

“We’d be mad to do a major reform of our electricity market without making sure we're maximising the potential to reduce demand. That’s the most cost-effective way of cutting carbon emissions.”

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