12 July 2011

Energy White Paper: Decisive action to prevent power blackouts by 2020
Energy Minister, Chris Huhne, warned of regular power blackouts by 2020 unless he took 'decisive' action and outlined five points to improve the UK's energy market.

Mr Huhne, addressing Parliament on Electricity Market Reforms (EMRs), also said consumers 'will need to pay to secure a low carbon future' directly addressing and confirming energy bills will increase.

He said: "We need to invest 110 billion, twice the rate of investment of last decade, and demand is likely to double over next 40 years as we increasingly turn to electricity for heat and transport."

Mr Huhne said if the UK did not invest in renewables now with an electricity market that was 'not up to the job' we risked regular power blackouts by 2020.

The energy minister said the alternative was relying on increasingly expensive fossil fuel imports, which would increasingly mean the consumer paying more.

Mr Huhne continued saying he was introducing: "A series of measures to reform the electricity market diversifying the energy mix and boosting investment in secure home grown and low carbon technologies.

The energy minister outlined five key elements:

Firstly, the new carbon price floor already announced in the budget

Secondly, Contracts for Difference a 'clearer message' that low carbon energy generation is 'key' - a new system of long term renewables contracts to boost investor and consumer confidence.

Thirdly, the introduction of an Emissions Performance Standard - to send a clear regulatory signal on emissions levels from new coal power station, which Mr Huhne also added will have to have the unproven Carbon Capture and Storage (CCS).

Fourthly, new contracting framework for capacity a change to the way the UK stores back up energy set aside from the market or an offer of cash for companies that store energy for times when there's increased demand.

Fifth, new arrangements to ensure the renewables market remains strong during the transition between the current system and the new one.

Mr Huhne added: "These reforms are the biggest transformation of the market since privatisation."

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