Revision of UK energy strategy vital for the future
Summary
Whilst secure and affordable electricity has been delivered in the past, investment is necessary to strengthen the UK market for inevitable future challenges.
The White Paper 'Planning our Electric Future: a White Paper for Secure, Affordable and Low-carbon Electricity’ (Cm. 8099) sets out the Government’s proposals to improve the UK’s electricity system to ensure that the UK electricity supply is secure, low-carbon and affordable.
Set out by the Department for Energy & Climate Change, the reform is especially crucial as we face a number of unprecedented challenges in the coming decades.
Future challenges include:
- the threat to security of supply as existing plant closes;
- the necessity to decarbonise electricity generation; and
- the likelihood for a rise in electricity demand; and
- an expected rise in electricity prices.
Broadly, the strategy’s approach consists of four parts:
- Long term contracts for both low-carbon energy and capacity.
- Institutional arrangements to support this contracting approach.
- Continued grandfathering, supporting the principle of no retrospective change to low-carbon policy incentives, within a clear and rational planning cycle.
- Ensuring a liquid market that allows existing energy companies and new entrants to compete on fair terms.
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