UK Parliament / Open data

Energy Bill

As I say, I am quoting the CBI specifically on this matter, and it cites the year 2045. Although I understand what my noble friend is saying, I cannot renege on the fact that the CBI is specifically citing that particular year in the quote that I wanted to mention to the Committee.

There has also been a query, although we are going to discuss the 300 grams in further amendments, about the 450 grams. That figure represents a significant reduction in the emissions of a new coal plant. This level builds on and supports the planning requirement for any new coal plant to be equipped with CCS while being above the level of carbon emissions for a new gas plant. The 450-gram limit also provides some flexibility for CCS projects to help manage the uncertainties associated with first-of-kind technology. As I say, though, we will have a separate debate on this matter with the amendment of the noble Viscount, Lord Hanworth.

If I may continue, I say to noble Lords who may be concerned that we are locking in high levels of unabated gas generation well into the future, while grandfathering will give investor certainty over the regulatory regime under which their assets will operate in relation to EPS, it does not permit a right to emit. This is because as levels of low-carbon generation increase, with its use effectively prioritised due to its low generation cost, unabated gas generation will increasingly be displaced. The role of gas will therefore be to balance an energy system that includes greater amounts of inflexible and intermittent generation. Analysis for our gas generation strategy shows average overall load factors for gas plants at around 27% in 2030, based on achieving 100-grams-per-kilowatt-hour grid average emissions intensity.

The role of government is to strike a balance between the three objectives of energy policy: to decarbonise our electricity system, to maintain security of energy

supply to the country and to keep costs to consumers to a minimum. I understand that the intention behind this amendment is to provide greater certainty for decarbonisation but, for the reasons I have set out, I believe that shortening the grandfathering period of the EPS would introduce uncertainty and risk to the new gas plants we will need to build up to 2030, and that the better way to balance these three objectives is through the approach that we are taking in the Bill.

I will study the references that have been made during this short debate, particularly my exchanges with my noble friend Lord Deben. As this is a technical matter, it would probably be better if I wrote to him and other noble Lords on this. I appreciate that the noble Baroness will be disappointed by my reply but I hope she understands that the Government cannot support her proposed approach because of the three objectives that we need to balance. On that basis, I hope that she will withdraw her amendment.

About this proceeding contribution

Reference

747 cc261-2GC 

Session

2013-14

Chamber / Committee

House of Lords Grand Committee
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