The government should push ahead with emissions performance standards limiting the amount of carbon dioxide produced by UK power stations.
That’s the verdict of a report published today by the Energy and Climate Change Committee, which slams the existing policy framework as “grossly inadequate”.
The report states that an EPS offers “a more certain and predictable way to prevent lock-in to high carbon infrastructure than other means”. This, the committee said, is in itself “adequate justification for implementing an EPS”.
It adds that an EPS “has the potential to provide certainty to investors that there will be a future market for low-carbon electricity” and at an international level could act as a template for other EU states to follow.
But the report has run into immediate criticism. Chief executive of the Association of Electricity Producers David Porter said: “An EPS for fossil fuel fired power stations is not a straightforward proposal and may be in breach of EU law. It is essential that it is not applied to existing installations.”
Mr Porter said new coal fired power stations are already required to demonstrate carbon capture and storage technology, but added that “CCS is an emerging technology and if energy companies find that they are required to meet an emissions standard that is technically impossible or commercially uneconomic, investment will not go ahead”.
He also said that because fossil-fuelled power stations already have a cap on CO2 emissions to meet European Union reductions under the EU Emissions Trading Scheme, “an EPS amounts to a double regulation for one problem”.
He cautioned that “an inappropriate EPS may deter, rather than encourage, investment in low carbon generation”.
“It is likely to add to customers’ bills and may have the unintended consequence of closing fossil fuel power stations too early. Electricity producers are working hard towards a low carbon future, and it’s important this work isn’t delayed by political uncertainty.”
Energy Minister Charles Hendry today reiterated that the government would publish its proposals for an EPS as part of its Electricity Market Reform.
He added: “What’s important is that we design a package of reforms that ensures the best deal for the consumer at the same time as bringing on the scale of low-carbon investment we need in our electricity infrastructure.”