Thursday 16 December 2010

Electricity reform must deliver investment risk/reward balance

The boss of SSE Scottish and Southern Energy said that today's Electricity Market Reform must deliver "an appropriate risk/reward balance for investment" in all low-carbon technologies.

Chief executive Ian Marchant said: "The first test of EMR [Electricity Market Reform] is that the value of existing investments is protected as the market is reformed and it is therefore very welcome - and critically important - that the government is proposing robust provisions here."

He added that up to 2030, "substantial investment is needed to decarbonise the power sector and maintain security of supply whilst ensuring electricity remains affordable. Fundamentally, therefore, the EMR process needs to deliver a framework which encourages delivery of all of the key generation technologies needed over the next two decades - renewables, thermally-efficient gas-fired power stations, nuclear and carbon capture and storage (CCS) - and ensure an appropriate risk/reward balance for investment in these technologies."

He said to do this required "an evolved market structure, which the EMR process is appropriately timed to deliver".

And he cautioned that the reforms "should reflect Scotland's leading role in deployment of low carbon generation, with already half of renewables generation located in Scotland and attractive sites for development of CCS".