Big Boost for U.K. Gas-Fired Plants

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The U.K. government has set out a raft of proposals to help kickstart investment in new gas-fired power plants.

Edward Davey, the Energy and Climate Change Secretary has revealed contentious measures to be included in the forthcoming Electricity Market Reform legislation to provide certainty to gas investors. This includes allowing all new gas-fired plants to run without any carbon capture and storage (CCS) technology until 2045. The controversial decision to allow gas-fired plants to sidestep the CCS requirements for coal-fired plants has been attacked by renewable energy and environmental bodies.

The U.K. is facing an energy crisis in the coming decade, thanks to closure of older coal-fired and nuclear power plants, and the government views new gas-fired plants as essential to filling the gap.

"I want a decarbonised grid in the long term, but we can't take our foot off the gas for some time yet," argued Davey. "A fifth of the U.K.'s ageing fleet of power stations will close this decade and it's not possible to fill that gap entirely with low carbon alternatives in that timescale. Gas will continue to play a vital role in a low-carbon economy. Modern gas-fired power stations are relatively quick to build and twice as clean as many of the coal plant they're replacing. Carbon capture and storage promises to give gas an even longer term future in the mix."

He added: "A substantial number of new projects are already in the pipeline and I'm keen to hear the views of industry and investors to make sure our reforms give them sufficient certainty. This is all part of our commitment to transforming the market, providing long-term certainty to investors, increased competition, and the best deal possible for consumers".

Two of the main measures include:

- The level of the Emissions Performance Standard, designed to limit the emissions from individual plant, will be enshrined in primary legislation. Power stations consented under the 450g/kWh-based level would then be subject to that level until 2045, a process called 'grandfathering' which provides long-term certainty to gas investors.

- The Capacity Market will be designed to bring forward sufficient investment in new reliable capacity, including gas, in order to ensure security of electricity supply. This will help to ensure that there is sufficient capacity in place to cope with peaks and troughs in demand.

Chancellor or the Exchequer, George Osborne added: "The Government is providing certainty to businesses that want to invest in gas. Gas is a reliable, affordable source of energy. We need to recognise that gas will be a vital part of the mix in delivering affordable and secure low-carbon energy.

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