11 Feb 11

Carbon Price Mechanism a first step in the year of delivery for secure, affordable, low carbon energy


"2011 has to be the year of delivery for secure, affordable, low carbon energy," said EDF Energy Chief Executive Vincent de Rivaz, as HM Treasury’s carbon price mechanism consultation closes today. "We must deliver not delay on the legislation to meet the UK’s pressing energy challenges ."

Mr de Rivaz set out the need for a holistic approach to market reform including three elements:

"First, a Carbon Price Floor. That will remedy the failings of today’s trading scheme. Our own analysis indicates the second price scenario in the Treasury’s consultation stands to strike the right balance for customers and industry. This introduces the carbon price at a low level, rising gradually by 2020 and beyond to as new low carbon capacity - including nuclear - comes on line. We believe the Government is right to target a carbon price of £30 in 2020.

"Second, Capacity Payments, which will reward investment in firm, available generation. They will provide the security of supply we need as more intermittent generation is placed on our grid.

"Finally, Contracts for Differences, which will address risk and volatility in the market, providing greater certainty for customers and investors, delivering the lowest possible costs."

Mr de Rivaz emphasised that 2011 has to be the year of delivery of the market reform for the UK to secure the investment needed in energy.

"Carbon price floor is an important first step, which we expect to see put into law in the spring," Mr de Rivaz said. "The consultation ending today is vital. Further, to continue to target 2018 for commercial operation of our first new plant at Hinkley Point, we also need a Government white paper on market reform before the summer, with legislation following quickly.

"The reforms the Government has set out are fair and in the interests of consumers. They will encourage investment, establish secure and low carbon electricity and help keep future bills lower than they would otherwise be."

EDF Energy plans to build four new nuclear power plants in the UK with partner Centrica.