Miliband: Dynamic markets "not enough" for UK energy
Wednesday 10 December 2008
 |
| Secretary of State for Energy and Climate Change Ed Miliband |
The government will set out next summer how the UK should achieve "near zero-carbon electricity by 2050", energy secretary Ed Miliband said last night.
Giving a guest lecture at Imperial College, London, Mr Miliband suggested firm government intervention in the form of a carbon price was on the table for future UK energy policy.
This would be done through the cap-and-trade Emissions Trading Scheme, he said.
The Secretary of State said the best prospects for future energy would be based on a "trinity" of renewable energy, nuclear power and carbon capture and storage (CCS) systems for fossil fuel plants.
But explaining the philosophy behind his new Department for Energy and Climate Change, Mr Miliband said the move to low carbon energy would not be left to the private sector alone.
The role of the private sector in providing £100 billion of investment in energy infrastructure was "absolutely essential", he said, but added: "Dynamic markets on their own are not enough for a successful energy policy."
The Secretary of State said the UK had moved on from the 1980s, when free market mantras ruled.
"No individual company will fully respond to the public interest in tackling climate without a price on carbon," Mr Miliband declared, pointing out that power companies had an interest in supplying energy, but not necessarily in providing the UK with energy security.
He also said that it was public interest that would drive energy efficiency.
Efficiency and security
The lecture at Imperial College's Energy Future Lab saw the energy secretary dismissing the 1980s view that individuals would invest in energy efficiency measures of their own accord.
He suggested there were "significant market failures" in such a policy, including lack of information and access to finance for householders.
Instead, he said the government was driving the development of zero-carbon homes and helping people install insulation and energy efficiency measures.
Along with a response to this month's Committee on Climate Change report on carbon budgets running to 2020, next summer will see the government issuing a report on fuel poverty and energy security. The latter report is being drawn up by former energy minister Malcolm Wicks, who will look at the need for a diverse supply of energy in the UK and the global context of energy security.
"On security of supply grounds, we need the right role for government, responding to future trends in supply and demand and ensuring we have a diversity of energy sources for our country," Mr Miliband said.
On Renewables
Regarding renewable energy, the secretary of state pointed to the improvements to the Renewables Obligation (RO) that would "drive the technology that's needed".
Mr Miliband said the RO would soon be "weighted to five more credit to technologies that most need development". The government published its response to a consultation on improvements to the RO last week.
It said the reformed RO would be "30% more effective in delivering new generation over the next few years than the RO would be in its current form", and should come into force in April 2009.
On Nuclear
We cannot say in 20 years' time we will be building unabated coal-fired power stations and that we will meet our carbon budgets.
Mr Miliband said last night that there should not be a concentration on renewable energy alone. He said the government needed to do "all we can to ensure that the UK is one of the best places in the world to invest in nuclear".
This wasn't about subsidies, he said, but added that the government could not "sit on its hands".
"We need to license reactor designs and facilitate site selection," he said. "We need to make sure that companies put money aside from day one to pay for the eventual clean-up."
On CCS
As Europe discusses possible funding for carbon capture and storage demonstration plants later this week, Mr Miliband also stressed last night the need for the UK to lead the technology development.
He said there were "uncertainties" around the process of extracting carbon dioxide emissions from fossil fuel combustion plants, but stressed the importance of the technology for Britain and the world, with China building "two coal-fired power stations a week" and countries like Poland heavily dependent on coal power.
"What is clear is that we cannot say in 20 years' time we will be building unabated coal-fired power stations and that we will meet our carbon budgets - it's not credible," the energy secretary said.
The government will publish proposals on CCS in the New Year, Mr Miliband added.
Print
