Industry backs UK energy policy report
15 Dec 2008
London - Industry groups have welcomed the conclusions of the Business and Enterprise Committee report Energy policy: future challenges, which were issued last week.
Commenting on the report, Chemical Industries Association chief executive Steve Elliott said: "The committee has addressed many of the concerns we have about the current state of the UK energy markets. I hope the new Energy and Climate Change Select Committee will continue to press for the recommended changes in the market."
For the Association of Electricity Producers, David Porter, chief executive stated: It is reassuring that the Committee recognises that energy companies need to be profitable in order to invest in new electricity production. We are fast approaching a 'generation gap¹ and about £100 billion needs to be spent on new and greener power stations.
"That is a huge sum of money for investors to provide. It is absolutely vital that the government should always try to ensure that the UK is an attractive destination for investment in new energy infrastructure. If it fails to do that, the consequences could be dreadful."
According to Porter, there is also a need to recognise how important it is for investment that the industry should be profitable: "It is time to stop bashing the electricity industry and to encourage the investment that we need to keep the lights on."
Meanwhile, the Chemical Industries Association urged the Department for Energy and Climate Change and Ofgem act on there key areas of energy supply:
Gas Storage
Decisive steps are needed to ensure a big increase in gas storage capacity in a bid to stabilize gas prices, we agree that a simple trust in the market's ability to deliver will lead to a disastrous 'energy crunch' in the medium term.
The principal gas suppliers see no self-interest in constructing storage facilities as they profit from high volatility and prices. Although there is a list of projects in prospect, many have not yet reached the stage of submitting a planning application, while many that have, have had it refused.
Liquid Natural Gas imports
Action is needed ensure genuinely workable arrangements for third party access to spare capacity at LNG importation facilities.
Generation capacity
We need early action to ensure adequate investment in new generation capacity.
With no new nuclear capacity likely to be available within 10 years, several coal fired plants closing because of old age and new ones having difficulty obtaining planning permission because carbon capture and storage remains a distant vision, and wind power being not only unreliable but increasingly expensive to construct, we face the real risk of the lights going out before 2015.
