Friday, 24 December 2010

UK Energy Market Reform Too Good To Be True? Probably.

The UK's Department for Energy and Climate Change Secretary Chris Huhne
announced the biggest energy reform "in decades" on Friday.

The reform package includes:

* a carbon price floor "increasing the cost of fossil fuel based
generation, and strengthening the carbon price for UK electricity
generators." * two Feed in Tarrifs: standard and premium contracts under which "the
Government will agree to clear, long term contracts" which essentially
places a certainty on the price of renewable energy (and thus the benefit to
consumers and energy generators) which therefore makes investment
(theoretically) less risky. * an Emissions Performance Standard that ensures no new coal power
plants are built without carbon capture and storage technology in place * incentives for energy grid demand reduction measures and building
spare renewable generation capacity, dubbed 'negawatt' capacity by the
government. Negawatt capacity will be monitored by a Capacity Mechanism.

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