Despite innovative ideas lain out yesterday in the Electricity Market Reform (EMR) White Paper, leaders in the green energy sector are demanding that the Government solidify and clarify EMR policies to harbour investment in renewable energies.
Measures described in the
EMR White Paper, such as the Government’s creation of a new system of
Feed-in Tariffs, have potential – however, with £200 billion in
investment needed to support a new market for electricity, many organisations say this isn’t enough.
"More detail is needed on tariffs, and the case must be made for a capacity mechanism," John Cridland, director of the Confederation of British Industry (CBI) said. "We need a clear decision on both by the end of the year to avoid damaging investor confidence. Everyone wants to make our energy infrastructure more secure and sustainable for the future, but businesses cannot be expected to write a blank cheque. The Government still needs to spell out what it thinks the final bill for all of its electricity market reforms will be."
Investor confidence
Though one of the EMR White Paper’s goals is to create secure ground for investors in
renewable energy, abrupt changes to previous
policies have left businesses and potential investors antsy.
"When Feed-in Tariffs are being amended less than a year after introduction, and the Renewable Obligation regime is under review before being superseded with a replacement regime post the outcome of the EMR, investors in renewable energy are facing a particularly uncertain time," Ben Warren, partner and head of Renewable Energy at Ernst & Young, said. "Not helpful when the level of investment in renewables needs to be urgently ramped up."
Praise for EMRMany players in the renewable energy field have praised measures lain out in the White Paper, particularly in the sectors of carbon capture and storage, wind and marine energy and biomass. According to players in these industries, Government encouragement of these renewable technologies could lead to job creation, savings on electricity and increased investment in green energies.
More critical concerns include the lack of information given regarding plans make the grid more capable of handling new energies and too little encouragement given to the use of on-site generators. Additionally, worries that he new Contract for Difference Feed-in Tariff will block out smaller energy suppliers have been voiced.
Though the White Paper presents decent ideas, making them happen will be a challenge.
"We have long called for our electricity markets to be reformed," Cridland said. "The Government’s package contains some good measures […] but these need to be made to work."
To read the full reaction to the ERM White Paper from business, click here.
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