Electricity investment plan to be unveiled
12 July 2011
Plans for £110bn of investment in electricity generation are set to be unveiled later this summer by the Department for Energy and Climate Change. The plan would replace a quarter of the country's power stations by 2030, Energy Secretary Chris Huhne said. It also aims to insulate the UK from swings in oil prices by increasing sources such as nuclear and renewable energy.
Mr Huhne said that claims the cost of the investments would hurt consumers were misplaced.
He pointed to recent rises in utility bills by British Gas and Scottish Power, claiming that these companies had already imposed a cost on consumers in one day, similar to what the investment programme would involve over several years.
A key recommendation of the paper is expected to be long-term price contracts with domestic nuclear power plants and offshore windfarms, in order to make electricity prices more stable.
"[The white paper] provides insurance for consumers against that sort of shock," he said.
The DECC said that its investment plans would cost £160 per household per year by 2030.
In contrast, the Department said that if the system remained unchanged, then electricity bills would go up by £200 a year over the same period.
The planned investment is equivalent to 20 large new power stations, double the pace seen in the last decade. It aims to raise the share of renewable energy sources to 30% of electricity generation by 2030, from 7% currently. The government also foresees new nuclear power stations being built as well. It would also see the building of new coal-powered generators with technology to capture carbon emissions, as well as new gas-fired power stations.
Natural gas is regarded as cleaner than other fossil fuels, and gas prices are expected to remain cheap thanks to the development of shale-gas deposits in the US coupled with the growing international trade in liquefied natural gas.
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