Futureproof Renewable Sustainable Energy #2

PRASEG Annual Conference 2012
http://www.praseg.org.uk/save-the-date-praseg-annual-conference/
“After EMR: What future for renewable and sustainable energy?”
31st October 2012
One Birdcage Walk, Westminster
Twitter hashtag : #PRASEG12

Continued from Part 1. Followed by Part 3.

PLEASE NOTE : The record is NOT verbatim and should not be treated as such. Check against delivery, I think they say in the trade. If I have scribbled incomprehensively or missed something, I have interpolated according to the spirit of the context. I am open to correction or challenge on my record of the event.

[Start of second session : “Demand side policy: The missing element ?]

[Caroline Lucas MP]

Demand side is often the poor cousin – it’s a shame to leave it to the end of the meeting.

[Andrew Warren, Association for the Conservation of Energy (ACE)]

Let’s run through the patronised world of energy efficiency. The Committee on Climate Change always emphasises two things are going to have to happen to de-carbonise the economy. First, new generation – but also, what do we do with consumption ? How do we deliver the society we want while consuming less ? Germany has a broadly similar aim – competitive energy, energy security. DECC projects a doubling, or even a tripling of electricity consumption. Germany tries to achieve exactly the same objectives, but consuming 25% to 40% less energy overall. What have we been doing in the UK ? Passing EU Directives, in particular, the recent Energy Efficiency Directive. This is interesting – we have never had targets on energy efficiency before. Energy efficiency is moderately politically uncontroversial – apart from some of the things put forward in connect with the work of the Department for Communities and Local Government (CLG) over the Building Regulations. It is key that new build should follow the new standards, and it is also key that when improving existing buildings, that the new standards be used. The Guardian last Saturday carried a front page explaining that CLG would look *again* at Building Regulations [ http://www.guardian.co.uk/politics/2012/oct/26/government-building-standards-review-regulation http://www.guardian.co.uk/business/2012/oct/31/dangers-bonfire-building-regulations ]. The original Government consultation concluded in March 2011 – but there has been no conclusions or report since then. Unfortunately, we need those conclusions by October 2012 in order to maintain progress on the agreed time schedule. What do we see from CLG ? A “conservatory tax”. There are problems in DECC on issues like Fuel Poverty. There are 5 million people in the UK in fuel poverty, and the only Government-funded programme to address this will be terminated in March 2013. Even though the funding for the programme was cut by two thirds last year, it didn’t manage to spend all its money. Perhaps there will be measures in the EMR to impact energy efficiency ? We need to modify the Capacity Mechanism [of the EMR] so that we can incorporate demand side into that. Parallel to the work on the Energy Bill, there is the Energy Bill Revolution, outside Parliament, which argues that if we are start increasing the cost of energy through policy and measures such as the EMR and the EU Emissions Trading Scheme (EU ETS) modifications, then those funds ought to come back to consumers – this happens in Germany. There is some good news – this year we have at last got a strategic body which will deal with the deployment of energy efficiency [the Energy Efficiency Deployment Office (EEDO)]. We do have the Green Deal and the smart meter rollout, but the key thing we’ve never had before is some entity in Government that speaks strategically on demand side.

[Peter Boyd, Expert Chair, Energy Efficiency Deployment Office (EEDO)/Carbon War Room]

I work one day per week for EEDO. My “day job” is with the Carbon War Room where we’re looking at the left hand side of the McKinsey MACC cost curves globally. [The McKinsey & Company Greenhouse Gas Abatement Cost Curves show on the left hand side where carbon savings are cost-negative and so produce payback : http://www.mckinsey.com/client_service/sustainability/latest_thinking/~/media/mckinsey/dotcom/client_service/sustainability/cost%20curve%20pdfs/impactfinancialcrisiscarboneconomicsghgcostcurvev21.ashx ] We work on marine shipping […] This is right in the wheelhouse of what we are talking about today. A strategy on energy efficiency has to be linked to carbon targets. For example, the world economy currently produces 768 grammes of Carbon for each dollar of GDP. To get to sustainable levels of emissions [the two degrees Celsius UNFCCC target], that figure has to drop to 6 gC/$GDP. This is a complete pivot for the world economy. If we don’t address energy efficiency, where there are savings, are jobs, are growth. The role of the EEDO is explicitly aiming to fill in the joins in DECC and other departments. The key place where the economy and the environment can work together. There is a suite of announcements to come – to tackle market failure by market failure, new policies and measures are needed. We work with many departments and stakeholders. We held Summer briefings. If anyone wants to take part in the process, they’re welcome to speak with me. There is a recognition that demand response (demand side response (DSR) and energy demand response (EDR)) is underweight in the current Energy Bill. The team in DECC will look at how EDR can be put into EMR – which it is not covered by yet. We are coming out with a draft report on strategy in November 2012. Why is capital not flowing to get white vans out on the roads, rolling out insulation ? We are committed to working with practitioners. With the EMR it will be helpful to get behind it and not just throw rocks at it – it won’t help. I’m passionate about energy efficiency. The UK has a fantastic opportunity to be a world leader – a country with poor weather and leaky buildings.

[Roisin Quinn, National Grid]

On the Capacity Mechanism, our role in the EMR is to be the delivery body, not the counterparty [to the various Capacity Mechanism and Contracts for Difference (CfD) contracting and strike price]. For the CfD, we will assess eligibility of projects. We will be running auctions for Demand Side Response (DSR) [aggregators of DSR such as Kiwi Power http://www.kiwipowered.com/ will be capable of taking part in these auctions]. We will take responsibility for energy security outcomes, and monitor costs and progress. We won’t be setting government policy. We will have access to sensitive information under the EMR, but we will not use that other than for EMR policy-based contracts. What does the Capacity Obligation (under contracts for the Capacity Mechanism) mean for EMR ? The idea of the Capacity Mechanism is to ensure that generators supply electricity when needed, or DSR can reduce demand “when needed” – for example on a cold Winter’s night. We need to redefine what “when needed” means to make sure the consumer is protected. There is such a potential for DSR to be really valuable. The National Grid is working with DECC to access DSR ahead of the Energy Bill. We are looking at consumer issues and continuing discussions with DSR providers – who would supply balancing to the grid as well as overall demand reduction. We host the National Grid forums nation-wide. We lead on developing the pipeline of projects needed for energy security – what products can be packaged, and what the lead time is for energy storage compared to DSR. We are looking at measurement and verification (M&V) criteria, so that we can all have confidence in DSR packages, and that M&V does not present a barrier to entry in the DSR market, and future-proofing. We’re not there yet. We’re still on the journey. This is a transitional scheme and we are pleased with our engagement with DSRs [DSR providers and aggregators] so far.

[Judith Ward, Director, Sustainability First (ex-National Grid)]

Sustainability First is a small environmental think tank running three year multi-project. We are looking for the scope for DR (demand reduction) and DR (demand response). We need to understand the economic values for customers and industry players. We have a strong practical focus – some of us are in the Low Carbon Forum/Fund and Ofgem and so on. All our papers are published as we go [http://www.sustainabilityfirst.org.uk/]. We aim to produce a “best picture” on how we use electricity in the country today. We’ve done a survey of large industrial customers and done household data research. Without a clear grasp of how consumers really use electricity, we are working with ill-informed risk. In understanding electricity usage the key is in re-engineering the consumer. Our fifth report is out next week. DSR is value today for sale into the UK balancing and “peak” market [peak load is a daily occurence, when a much higher demand for electricity lasts for somewhere between 30 minutes and a couple of hours, on a fairly regular daily basis. For the realtime example :
http://www.nationalgrid.com/uk/Electricity/Data/Realtime/Demand/Demand60.htm http://www.nationalgrid.com/uk/Electricity/Data/Realtime/Demand/demand24.htm http://www.nationalgrid.com/uk/Electricity/Data/Realtime/Demand/Demand8.htm ] For the large customers on half-hourly distribution network, use the triad scheme to avoid charges [ http://www.flexitricity.com/core-services/triad-management ] Do we need yet more DSR – or is it premature at this point ? We need to understand schemes, how the services will supply flexible and peak avoidance. For the Capacity Mechanism, we need to introduce price information – however basic – so that customers know what they can earn by taking part [in DSR aggregator contracts]. Sources of flexible, suitable load are somewhat limited in the GB electricity system – but there is a surprising amount of peak electricity heating in commercial and some residential applications. But is there potential to shift it to overnight charging ? For retailers there is little incentive to promote DSR at scale. For the vast majority of the 29 million customers, the smart meter rollout is far away, but the settlement system adjustment is close at hand. The question is how to unlock smarter markets. System flexibility has to increase by the 2020s, so will need a more controllable load – and the system costs will go up. The search is on for new sources of flexibility in electricity load. At present there are incentives for electricity demand reduction – lower bills. But from the perspective of the electricity system, not all electricity demand reduction is useful. The time of day and season related. “Time of use” tariffs should promote electricity demand response, assigning value. The Green Deal and the Energy Company Obligation (ECO) should work in a more concerted way to deliver more demand response. Let’s be clear about the priorities on what to do first. Electricity has specific end uses – targetting those could make a difference today. Light efficiency schemes are not very glamorous…

[Questions]

[Tim Probert, New Power]

A question for National Grid. The existing balancing mechanisms – will they be part of the Capacity Mechanism ? Or will there be extra money available to balance grid load [under the new regime] ? The cash out settlement system charges will need reviewing – will more revenue be available for those with flexibility to help in balancing load ?

[Jenny Holland, Association for the Conservation of Energy (ACE)]

Is long-term demand reduction in your frame in the Capacity Mechanism ? It is simply not going to happen if the draft Energy Bill stay the same. In the United States, the market is “technology-neutral”, but only 10% comes from demand control. If DSR and energy efficiency are not targetted, they won’t happen. Generators will be able to bid in at a lower cost than DSR and energy efficiency – as they will get money for selling their electricity, *and* for the Capacity Mechanism. We are favouring modification of the Energy Bill with a merit order that favours low carbon and demand reduction, not letting gas wing its way though and swamp the Capacity Mechanism.

[Roisin Quinn, National Grid]

Absolutely agree. We should not be locking ourselve into long-term contracts with the implication of demand in future that just won’t be there. To date our focus has been DSR, not long-term permanent cuts in electricity use.

[Peter Boyd, EEDO/Carbon War Room]

From the strategy side we are looking at options for permanent demand reduction [energy demand reduction (EDR)]. We can exploit international learnings. We’ve recognised that DSR is just a small part of the EDR landscape. This is a market failure – where poor information is preventing [development].

[Andrew Warren, ACE]

Th National Grid are “implementing policy coming through”. There is a complete absence of anything in the draft Energy Bill on the demand side as opposed to addressing load balancing and peak demand issues. We should be trying to do what Germany and some American States are doing – allowing direct comparison. Which is cheaper – investing in new generation or investing in demand side reduction ? The cheapest way in almost all circumstances is to reduce the overall level of demand. It’s important that the National Grid flag up the implications of yesterday’s solution dominating.

[Roisin Quinn, National Grid]

We are pleased to be involved with the DSR pilot scheme – demand avoidance is appreciated – especially when dealing daily peak demand.

[Judith Ward, Sustainability First]

Demand side and the capacity market – I get the sense that they are jelly-like because it is not clear what the Capacity Market is intended to do – either on supply or demand side. It’s hard to know if the DSR is is going to be locked out or not. Is it going to bring forward the merit cap ? In the capacity market, how much is likely to be backup generation [generation brought on at particular times when renewable energy is a a low], not turn-down [when plant is turned from full power output to standby] ? We need to look at the carbon emissions implications as well.

[Questionner]

Maybe we should look at it this way – “peak” equals “cap” and “demand” equals “energy” [to meet peak demand we need to cap it by demand reduction – temporary or long term, but to meet usual demand we need new and balanced generation]. Perhaps we should value these separately. There is clearly a market failure, there has been little supply increase. Could electricity distributors drive or aggregate demand response ? Perhaps they are better placed to do that ? There is more trust ?

[Mayer Hillman]

Are you sufficiently well-informed that climate change is now irreversible ? In the light of that, the only logical course of action is the Contraction and Convergence (C&C) global framework solution of equal per capita shares and rationing. In 20 years I haven’t seen any alternative. Does that not put that into perspective ? [The main argument of C&C is that there is no point in pricing or trading carbon unless there is a global cap enforced.]

[Matthew Parlour, “working for Lord Browne of Madingley”]

After half a century [of efforts on energy efficiency and energy savings] we have learned the consumers do not respond. An example is the difference in Americans being offered free energy demand measures. If the offer was on a website where they had to click to order something sent directly to them, they would not do it. However, if they were offered the same free product by telephone, most accepted it. How much have you thought through the rationality basics ? How do you see the balance of incentives offered to consumers and mandated changes ?

[Andrew Warren, ACE]

Mayer, you remain the voice of my conscience. The ice caps are melting. There is less and less opportunity to stop exploitation of Arctic oil – one of the single most depressing things – climate change is exacerbating, leading to greate availability of what caused it in the first place. In ones darkest moments, I turn around and say, oh my God, what are we going to do ? But there was an 18th Century philosopher who posed the problem of a man who did nothing because he thought he could only do a little. I would like to respond to Lord Browne’s assistant – and interesting question regarding the irrational behaviour of consumers. I am impressed by your boss, he changed BP. He was the first head of an international oil and gas company to say climate change is real. He demanded from all his operational groups 20% more efficiency [making the company more efficient and sustainable into the long term in getting oil to market to be burned to emit carbon dioxide…] – a diktat from the top. The rest of the world needs to follow what your boss proposed. With his new venture Cuadrilla, that “Prince Charming” George Osborne was enthusiastic at an event about the prospects for shale gas. Every other energy minister says that reduction in consumption is required. I hoep your boss not only asks for generous tax breaks, but also asks for support for the other more cost-effective solution – reduction of energy demand.

[Peter Boyd, EEDO/Carbon War Room]

You vote in a democracy – not because your individual vote really counts [but because of the accumulated effect]. The single biggest failure of the Non-Governmental Organisations (NGOs) at Copenhagen was to demand a global treaty, a single collective political goal – but the white van still needs to be paid to turn up [in other words : the practical details of creating incentives to get insulation done is more important in the long run compared to aspirations on paper.] It is becoming clear that Mitigation of and Adaptation to climate change needs to be joined by a third actor – Suffering. And we can only choose one of two options. We can either do Mitigation and Suffer [the cost] or we can do Adaptation and Suffer [the climate change chaos]. Climate change singularity is one of the problems our brains are not wired to compute. We’re not structured to solve this. We can we do now ? Energy efficiency. While the policy guys are going for the right hand side of the McKinsey MACC curves, and how we’re going to finance that, we’re going for the left hand side. Most of the technologies that can really make a difference are already 20 years old. And it will be a better world that we’re in – not a hair shirt and sandals world. On rationality – if we make these really efficient buildings of our workplaces and then walk around in tee shirts [with the heating turned up] at home, then we haven’t solved the problem. When energy efficiency measures do go in, we can minimise irrationality. What’s the electricity distributor’s role in delivering energy efficiency ? This is the Government’s iPod moment. The array of policies to solve this will get more complex, just like the technology of the iPod was more complex than previously. But the interface of the iPod was clearer, more attractive, and so was usable and popular. A company needs to come round to your house, do an assessment and say “this is what will work for you”.

[Caroline Lucas MP]

I welcome the stress on urgency [in relation to Mayer Hillman’s question]

[Judith Ward, Sustainability First]

The issue about possible supply failure. There has been retail failure in the settlement system – complex and opaque – a broken link between how upstream costs are recovered (on a socialised basis) weakens their resolve to offer cheaper tariffs. I think that if we can fix some of the issues in the retail market […] I think it’s too early to decide if we want a DSO-led [distribution system operator in the electricity grid] world or a supplier-led world. If we want to do a community project, if will be very difficult to get incentives.

[Roisin Quinn, National Grid]

Somebody needs to lead. Climate change. Can we do anything about it ? We have to try. We need a new electricity demand profile in the UK power market that flattens the evening peak load – then we could marketise this.

[Rebecca Aspin, powerPerfector]

Energy reduction should be 30% – 40% of our carbon targets. We are not really being energy efficiency focussed. We are disappointed that voltage (power) control is not in the SAP [the Standard Assessment Procedure for permitted technologies for consideration of Energy Bill subsidies]. It seems that policy cannot cope with electricity – they are more heat-focussed.

[Consumer Focus]

Regarding the problem with consumers being rational to accept energy reduction – the bigger problem is the implementation of DSR. There is not much money available to get consumers engaged in DSR. £90 per annum would be available – but not to consumers. Heat storage takes up a lot of space – how are we getting consumers to do this ?

[Judith Ward, Sustainability First]

The values in our eenrgy system are not there.

[Roisin Quinn]

There are savings, but they don’t add up to much. It comes down to questions such as – my cup of tea – really not worth the money to forego it.

[Peter Boyd]

Is £90 enough in a £1,200 energy bill ? It will be worth it to have Tesco turn off their air conditioning for a minute, but… Is there sufficient cash to see what is going on. The power of education – waiting for the kids coming through who know about energy demand ? We need a way to measure changes.

[Andrew Warren]

[to powerPerfector] You are not the only technology that is not in the SAP – in fact you have to consider the RDSAP [Reduced Data Standard Assessment Procedure] and a lot more technologies are not in there. On providing incentives : in the last few days, the Green Deal has put in place a 15 month £125 million cashback scheme rewarding you for implementing Green Deal measures – you don’t even need to take the Green Deal finance. This is to kickstart the Green Deal, and that is essential as [the Government’s own figures show] in 2013 there will be a reduction in insulation installation projected, if not.

[Caroline Lucas MP]

This does come down to political will. And the politicians will only act when more people want them to act. The population assume the situation is not serious as we say, or otherwise the politicians would have acted on it…

[Andrew Warren, ACE]

Ed Davey considers delivering demand side as being his number one priority – I know his commitment to energy efficiency. It has been an interesting day in DECC…

[Keynote Address]

[Ed Davey MP, Secretary of State, Department of Energy and Climate Change, and on the Energy and Climate Change Select Committee]

I would like to offer my thanks to this group for over the years pushing an agenda I believe is incredibly important – something I’ve been involved in for many years […] We have a Bill that we’re bringing to Parliament, a really critical bill for the low carbon agenda. The challenge that faces the country is that demand is set to increase, due to economic and population growth, with the electrification of transport and the electrification of heat. As demand is likely to go up as we de-carbonise, supply is going down. A fifth of all power plants are to close by 2020 – there is a huge need for investment – £100 billion in new low carbon electricity generation by 2020 and the network grids and so on. One of the real opportunities for the UK – which is struggling with growth and needs to get the economy going. Energy is often the largest [sector for growth] available. In the national investment plan, £250 billion is needed for infrastructure investment – nearly half of that in energy, several times more than needed in transport, six times more than for water, and seven times more than needed for Crossrail. We have to double investment in energy to meet that. This is a huge opportunity for growth. It’s important for energy security, keeping the lights on and for industry. It’s a huge opportunity – and we can use it to diversify – Carbon Capture and Storage (CCS) [to capture greenhouse gas emissions from coal burning] and nuclear and renewable energy all playing a part. It will insulate us from fossil fuel price spikes and the impact of [energy] bills, and meet our carbon targets. It is a timely opportunity that we need to grasp. The great thing about energy infrastructure investment is that it is available in all parts of the country – a good way of rebalancing the economy. The argument has always been that infrastructure planning takes too long – 4 to 5 years before the first sod is turned. But much energy investment money is ready. If we look at which part of the economy is growing, even in difficult times – it is the green sector. The whole point of EMR is to allow low carbon investment to happen – switching to a more low carbon [economy]. A key element is Contracts for Difference [Feed-in Tariffs] – a really smart investment instrument. On nuclear power we are negotiating bilaterally. And for Carbon Capture and Storage we have a competition. It is quite statist, quite interventionist. The EMR with CfD is about moving u from where we are through four phases to where markets are leading investment at low cost. In Phase 1, the Feed-in Tariff Contracts for Difference (CfD) prices will be set administratively [just as] had the Renewable Obligation prices set in the July review. The National Grid has already issued evidence for the strike price – to try to bring all technology groups down in cost and level the playing field. Some people think this is quite complicated. We will set a fair price, the strike price for low carbon electricity – a variable premium to top up the market price. Generators will pay back if their prices are higher than the strike price, therefore it is more cost-effective for the customer. I’ve spoken to investors – the CfD is really attractive – it offers a predictable return – smoothing out volatility. We will still get market efficiencies as companies will have to sell into the market. [In the Energy Bill I will have] powers to give project developers the comfort that they need [to arrange financing]. In 2017, Phase 2 will want to move to price discovery – with technology-specific auctions, such as with onshore wind generation. By Phase 3, current technologies will have matured, so we will move to more technology-neutral auctions. We could see all technologies competing on cost – clean affordable energy security. There is a huge amount of detail in this. We will publish in a few weeks’ time. Developers want early certainty – looking for entering into the CfD early. We will be providing commitment at a reasonable pace. Discussions about the counterparty and assuring its workability – this will probably be a company owned by the Government. In addition is the Capacity Market – as more of our electricity comes from renewable energy and less from gas etc, we will need to be sure we have enough to come on [in the case of wide variability in solar and wind power supply]. The National Grid is projecting shortfalls, so we will guarantee a steady payment for capacity – we are particularly keen to see a DSR when at the margins [of operability] at Peak [Demand, daily] organised by aggregators to prevent the prices peaking. We want to design a Capacity Market to ensure DSR plays its part. Liquidity is really important in the wholesale market – meaning for lower prices. I don’t think this is working well – we need a more diverse [energy mix]. Some think we should reintroduce the Pool, but that doesn’t solve the problem of lack of liquidity in the forward market. Ofgem has been working on potential reform – the threat of regulating has moved industry, particularly in the day-ahead market. I’ve made clear we’ll have backstop powers to promote liquidity […] On DSR, there is a real demand that Government drives permanent reduction in energy demand. This is crucial, and we are publishing our energy efficiency strategy soon. The Green Deal is going to be extremely exciting – we will see people having warmer homes, cheaper bills and lower carbon. [DSR will be either in the Bill o complementary to the Bill]. The whole point of the EMR is to move towards a low carbon economy – I think these proposals are very radical – they need backing. This is a real radical step forward.

[Andrew Warren, ACE]

You would have to be heroic to believe that you are anticipating increased electricity demand. Why have the Government got it so wrong ? If hand on heart you believe that electrification of transport will replace petrol and diesel in all cars and lorries. 70% of our gas is used to heat, and if that moves to being more electrical, it is heroic to suggest that electricity demand can go down. Our proposals are based on good calculations.

[Questions]

[Questionner]

Do you accept front page news ? That the Energy Minister has actively undermined your policy ?

[Ed Davey MP]

I hope you note the Prime Minister quotes. The Prime Minister has supported us, [saying that] although John Hayes made those remarks, it is not Government policy. I have taken personal charge of renewable energy. I am in charge of renewable energy strategy, including of onshore wind.

[Julian O’Halloran, BBC]

The implication from [John] Hayes implies that there will be a moratorium on wind power as there is enough in the pipeline already. Are you ruling out a moratorium while you are Secretary of State ?

[Ed Davey MP]

We are on track to deliver our aspirations (not targets) by 2020 as part of our renewable energy strategy, we are really getting motoring in renewable energy investment, rather than saying we don’t need any more […] I am conscious of the debate in certain parts of rural England and the Conservative back benches – 100 of them wrote to me on Day 1. It is their democratic right to voice their opinion. I issued a consultation on community energy, that new renewable energy infrastructure is part of their community and brings them benefit too. If we can show that people can benefit from onshore as well as other energy […] The opinions polls show that a significant majority are in favour, even if close to their homes. I got 62% of my Constituency vote. Wind farms are already more popular than I have ever been.

[Summit Skills]

The Green Deal Skills Alliance. We are not seeting [companies] committed to training. How can we stimulate demand ?

[Mayer Hillman]

You have confirmed my worst fears. Your aim is to match demand as efficiently and effectively as possible with the least environmental damage. Rather than the eonomy, in achieving a level playing field you should seek to attract a proper value to a tonne of Carbon. Years ago a tonne of Carbon was cheaper than now. I don’t see how you can achieve [low carbon] with a fixed price. The equation has got to include the displacement of ecological refugees.

[Jessica Lennard, Edelman]

In a statement you made [today], you said there are no targets or cap on renewable energy. Can the Minister comment on biomass ?

[Ed Davey MP]

There is a proposed cap on biomass – it is not completely financially within our envelope. Biomass investment is a bit lumpy, and [support for it] would displace [other energy technologies]. On demand for the Green Deal we’ve made a cashback available to encourage early movers. The Local Authorities are running [training] courses and we will be doing marketing efforts when after 28th January. I’d be surprised if demand was taking off now. We are expecting demand to grow – not whizz bang massive demand in the first month – it’s long-term. Solid wall insulation – it’s a bit of a hard sell. Investment is a 10 to 20 year business, not for a quick buck in the next quarter. Timing is really important, and expectations. We didn’t talk about our carbon reduction. The most ambitious carbon emissions reduction target in the world – [as outlined in our] carbon budgets. I’ve proposed decarbonisation in the Energy Bill. […] [Regarding Mayer Hillman’s points] The fixed price will be for low carbon investment. The rising prices will be on carbon. I’m working tirelessly to reform the EU ETS, to persuade the Poles and others. I’m doing exactly what I think you want – and the price of carbon should go up […] We should have no complacency whatsoever about closing the emissions gap. If sounds technocratic – markets and […] I apologise – this is how it’s done.

[Questionner]

The Prime Minister’s comments will be scrutinised in boardrooms around the world. In a speech to the CBI […] indicated a three month process in relation to gas generation investment.

[Ed Davey MP]

Called for evidence for the gas strategy to replace coal. There are various barriers to this investment. By the time you have planning gas technology has moved on – this causes delays.

[Andrew Warren, ACE]

The Energy Bill is incredibly important to get right. It’s not something that you can re-visit after 20 years – it is essential to get it right.

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