Charlie Lewis (DECC)
An Electricity Market Reform Perspective Charlie Lewis – Head of Energy Security, DECC
1
Overarching objectives ‐ secure, low carbon, affordable electricity
Tackling climate change
Ensuring secure supplies
Maintaining affordability
Climate change goals: 80% emissions reduction (from 1990) by 2050 and 5 year carbon budgets, 15% renewable energy by 2020 2
EMR proposals – a four point plan Carbon price support
Emissions performance standard Option 1
Option 2
EPS set at a level equivalent to 600g CO2/kWh
EPS set at a level equivalent to 450g CO2/kWh with specific exemptions for plant forming part of UK’s CCS Demo programme
Long term contracts for low carbon generation
EMR package
Targeted capacity mechanism
Tendered capacity, %
3
EMR Consultation document set out security of supply concerns … Around a quarter of our plant will close by 2020
Although we expect new plant to be built margins may be tight in the 2020s
Redpoint analysis Notes and sources: Existing capacity from DUKES 5.7, as at end 2009; excludes interconnectors. Closures refer to those due to LCPD opt‐out and known nuclear end‐of‐life dates; capacities taken from National Grid SYS 2010.
4
The Consultation A Capacity mechanism: • Consulted on targeted capacity mechanism • Condoc recognises that there are advantages in ensuring that the Demand Side can play a full part in the electricity market Process: • Consultation is live until 10 March • White Paper to follow. Questions …
5
1
Overarching objectives ‐ secure, low carbon, affordable electricity
Tackling climate change
Ensuring secure supplies
Maintaining affordability
Climate change goals: 80% emissions reduction (from 1990) by 2050 and 5 year carbon budgets, 15% renewable energy by 2020 2
EMR proposals – a four point plan Carbon price support
Emissions performance standard Option 1
Option 2
EPS set at a level equivalent to 600g CO2/kWh
EPS set at a level equivalent to 450g CO2/kWh with specific exemptions for plant forming part of UK’s CCS Demo programme
Long term contracts for low carbon generation
EMR package
Targeted capacity mechanism
Tendered capacity, %
3
EMR Consultation document set out security of supply concerns … Around a quarter of our plant will close by 2020
Although we expect new plant to be built margins may be tight in the 2020s
Redpoint analysis Notes and sources: Existing capacity from DUKES 5.7, as at end 2009; excludes interconnectors. Closures refer to those due to LCPD opt‐out and known nuclear end‐of‐life dates; capacities taken from National Grid SYS 2010.
4
The Consultation A Capacity mechanism: • Consulted on targeted capacity mechanism • Condoc recognises that there are advantages in ensuring that the Demand Side can play a full part in the electricity market Process: • Consultation is live until 10 March • White Paper to follow. Questions …
5
