Minister of State for Energy, John Hayes, has responded to OfGEM Chief Executive, Alistair Buchanan’s recent comments on energy security and potential prices rises.
“Alistair Buchanan’s remarks come as no surprise, because we know that around a fifth of our ageing power stations are due to close over the next decade. We are determined to secure investment in new plant. That’s why we are stepping up to the plate, by reforming the electricity market through the most radical Energy Bill in a generation, to ensure our energy security and to keep the lights on.
“These fundamental reforms will incentivise a record £110 billion of private sector investment in new power generation – in renewables, new gas, nuclear and Carbon Capture and Storage. Investing in a diverse energy mix will secure our energy future, and ensure we insulate consumers from the fluctuating price of fossil fuels.”
On 19th February, Alistair Buchanan warned that as UK power plants close and gas supplies from abroad shrink whilst demand increases, energy reserves are becoming “uncomfortably tight.” Mr Buchannan, writing in The Telegraph, compares the UK’s electricity supply system to a rollercoaster ride saying: “If you can imagine a ride on a roller-coaster at a fairground, then this winter, we are at the top of the circuit and we head downhill – fast.” He also makes the point that 10% of electricity generating capacity is due to close last month and that over the next three years reserve margin for electricity generation is expected to fall from around 14% to less than 5%. Gas is likely to provide up to 70% of our electricity by 2020 (up from 30% currently) with prices expected to rise.
Alistair Buchanan’s full article in The Telegraph can be found here.
For more information, help or advice please contact our Energy Team on 0191 211 7777 or email [email protected].