A good day for low carbon power

    December 4, 2013 8:18 AM by KelvinR

    If you are interested in the delivery of a low-carbon economy – and if you’re not, you should be – then the news coming out of the UK today is nothing but good.

    The British government has unveiled a series of measures and agreements that shows that it is (after, frankly, months of apparent dithering) throwing its weight and policies behind low carbon power generation.

    First of all it has published details of the subsidies it will pay renewable power firms under its contracts-for-difference regime, a mechanism which will involve the payment of a minimum sum – or strike price – per MW/h generated.

    It will pay a substantial £155 MW/h for offshore wind farms, and a lower £95 for onshore wind. Other key strike prices published today include £155 MW/h for advanced conversion technologies (with or without CHP); £125 for dedicated biomass (with CHP); £105 for biomass conversion; £145 for geothermal; £120 for large scale solar; and £305 for both wave and tidal projects.

    UK energy secretary Ed Davey today said that “investors are queuing up” to jump on the British low carbon bandwagon. “The strike prices give energy generators a sound, sustainable and long-term basis to invest in renewable energy,” he said. “They reinforce the UK’s position as one of the world’s leading renewables markets, and the number one place for business to invest in offshore wind generation.”

    Meanwhile, the government has also signed a deal with Hitachi-owned company Horizon to open the door to finance for a new nuclear power station that Horizon wants to build on the island of Anglesey in Wales.

    And Horizon has also today signed strategic contracts with three major UK based companies – AMEC, Atkins and Cavendish Nuclear – for the provision of engineering and related technical services.

    Not a bad morning’s work for the Treasury and the Department of Energy and Climate Change.

    Because at last the government is providing the one thing international investors and those in the UK energy industry have wanted for a couple of years: clarity.

    The strike prices give in black and white a policy statement that investors can base a decision on, while the Wylfa finance agreement underpins the government’s commitment to new nuclear.

    Nina Skorupska, chief executive of trade group the Renewable Energy Association, said that “today is a good news day for renewable electricity”.

    It’s a day that arrived too late to stop RWE pulling out of the Atlantic Array offshore wind project 10 days ago, but the government – and industry – will now hope that a repeat of that withdrawal by another investor is unlikely to happen.

Kelvin Ross is Deputy Editor of Power Engineering International magazine and its associated publications – Middle East Energy and the Global Power Review. Previously, Kelvin was News Editor at UK online news site Energy Live News, Production Editor and Head of Design on daily international shipping newspaper Lloyd’s List, Deputy Editor for a group of weekly London newspapers and has worked as a freelance sub-editor on UK national newspapers. - Follow Kelvin on Twitter @kelvinross68

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