A group of energy companies including SSE, Good Energy and Ecotricity have warned the UK government that it’s proposed Energy Bill may not provide the necessary support for renewables.
The Energy Bill, which promises to deliver a secure and decarbonised electricity system, was announced in the Queen’s speech last week.
But concerns hinge around the new supporting framework for low-carbon technologies known as ‘Contracts for Difference’ (CfD).
The signatories to the statement, which also include RES, Fred Olson Renewables and Natural Power, say that the mechanism as it is currently envisaged is flawed, extremely complicated and unclear for consumers.
The system is so complex, warn the companies, that generators, financial institutions and supply chain may be discouraged from investing in the UK energy market.
The statement also warns that the cost and risks associated with the new mechanism have not been sufficiently modelled by the government – and will be borne by energy suppliers and their customers.
The companies also claim that including nuclear power in the mechanism – an expensive and mature technology – risks a block or delay to the whole scheme under EU state aid rules.
“The government needs to ensure it has robust and workable solutions for renewables, at least outlined as options in its forthcoming Bill, to enable the delivery of a simple and effective scheme,” says the statement.
In case CfD is proved unworkable after the consultation on the Energy Bill, the signatories call for alternative options like the ‘premium feed-in tariff’, which is widely tried and tested in Europe, to be considered.
For further information:
Queen’s speech promises reform of UK electricity market (10-May)
UK government “papering over cracks of broken energy system” (12-Apr)
UK electricity market reform ‘hiding’ nuclear subsidies, says report (16-May 2011)
UK electricity market reforms too complex, warn researchers (11-Mar 2011)
Article source: http://www.energyefficiencynews.com/i/5111/