Market reform is a major landmark towards secure and low carbon energy, affordable for customers
Today’s announcement on electricity market reform including the carbon price mechanism is a major step forward for secure, affordable low carbon energy, EDF Energy said.
EDF Energy Chief Executive Vincent de Rivaz said: "This is a landmark day. The announcement reflects a broad consensus that a robust carbon price and other market reforms are in the interests of consumers and the environment, minimising the costs of meeting climate change and security of supply targets
"It creates a momentum that triggers the path to implementation in 2011.
"This is important. We are looking to drive about £20 billion worth of investment in new generation, working with our partner Centrica, to be on stream from 2018. Putting these reforms in place is an essential step to make this possible. The result will be secure, affordable, low carbon energy that will benefit consumers and support thousands of UK jobs.
"Given the progress at last week’s Cancun Climate Talks, the momentum to meet Britain’s climate targets in the most affordable way is vital.
"Today’s steps follow last month’s publication of the revised Energy National Policy Statements and the overwhelming Parliamentary vote in support of Regulatory Justification for nuclear new build. Together they demonstrate the Government’s commitment to delivering the right investment framework.
"The carbon price mechanism and electricity market reform are two distinct steps which encourage investment by putting values on decarbonisation and security of supply.
"The carbon price mechanism works with the EU Emissions Trading Scheme so that the carbon market can achieve its objective. It will encourage investment in all forms of low carbon generation including nuclear, renewables and CCS.
"The floor price can start low to encourage investment and ensure a smooth transition. It needs to reach a meaningful level in the years immediately following 2018, when the new low carbon generation comes on stream. It should then strengthen further to 2030, when we need to have largely decarbonised electricity.
"A floor price is in the interests of consumers. By providing more certainty to encourage investment in low carbon generation which is not dependent on volatile fossil fuel prices, it can shield consumers from higher costs in the future. We agree with the Government analysis published today which shows that any increase in bills as a result of investment will be lower with a carbon floor price than without.
"We also welcome plans for other market reforms to put a value on secure, low carbon capacity. Contracts for difference are a practical way to achieve this and we look forward to working with Government through the consultation to develop the details.
"It is vital that timely progress continues. The carbon price mechanism must be introduced in the 2011 Finance Bill and market reform should progress through an energy white paper in the spring and a Bill in the autumn.
"We will study the details of today’s package carefully before responding further."
Subject to the completion of the right framework, EDF Energy, with its partner Centrica, plans to build four new nuclear plants in the UK, with the first operational in 2018.
During the coming year, investment is expected in preparing the site, putting in place relevant infrastructure to begin construction subject to consent, and in placing orders with the supply chain.
Once operational the plants could contribute hundreds of millions of pounds per year to the UK’s public finances through corporation tax, business rates and income tax.
In addition, the project would create billions of pounds of opportunities for supply chain businesses and create thousands of jobs during construction and hundreds of permanent jobs during operation.
The company has recently completed one of the largest ever public consultations on its plans in Somerset, which are estimated to result in benefits to the local economy of more than £100 million each year during construction and £40m per year of operation.