Ok, so today’s budget might have made the Guardian’s green-o-meter dip down to two, as many claim that the green announcements are not far reaching enough, but let’s look on the bright side.
The UK is now the first country in the world to have introduced a Carbon Price Floor. While a few people in the industry will consider this too low – as indicated by the WSJ’s Selina Williams here – this is something for the UK to celebrate.
Aspectus PR client, Redpoint Energy, undertook supporting analysis for HM Treasury and DECC on the Carbon Price Support and director Duncan Sinclair said: “We estimate that wholesale electricity prices may be around £5-£6/MWh or 10 per cent higher by 2020 given the levels of carbon price floor announced today. This will have a significant impact on the earnings of power generators; with renewables and nuclear generators benefitting from the higher prices, while coal and older, less efficient gas plant will be hit by higher carbon costs, potentially accelerating closure.”
Any measure, however small, that favours low-carbon generation over inefficient fossil fuel plants will help the UK progress its plans to reduce carbon emissions. And, as Sinclair also points out in this Bloomberg story, there is more to come in terms of stimulating investment for low carbon generation from the announcement about Feed-in Tariffs with Contracts for Difference expected in December.