Providing our ElectricitY.

During the last decade or so, Britain has had a surprisingly liberalised and deregulated energy market.

In terms of responding to climate change and securing supply, the predominant instrument has been setting of targets in a market where almost half of our electricity is generated by gas and over a quarter by coal. Today, we face significant challenges in order to meet future demand.

Basically, there are two ways to produce energy - burning expensive fuel in relatively inexpensive facilities or investing in expensive infrastructure (including nuclear power stations) with low or no fuel costs. The coalition government is responding to this dilemma with an energy bill to introduce long-term contracts for low carbon generation through setting minimum prices to give sufficient certainty to firms investing in technology and infrastructure.

In parallel, nuclear energy is being promoted by the identification of sites for new capacity in order to attract the significant necessary investment.

I will be taking a keen interest in the bill as it proceeds through parliament.

I signalled this intention during the recess debate last week.

One policy area I highlighted is the question of energy and electricity storage because of the scale of peaks and troughs of demand.

There are technologies available, including liquid air systems, where generated electricity could be stored but, like generation infrastructure, some form of security is required to stimulate investment.

Locally, there is considerable interest in hydro-power (also a form of energy storage).

Micro schemes are being installed and we have a healthy range of firms able to support such projects.

With many old mills along our valleys, there are several further possibilities for this technology.

Interventions in markets must be carefully formulated.

This was proved with the Feed-in Tariffs for solar power.

The arrangements inherited by the coalition government were unsustainable and have now been replaced by introducing ‘transparency, longevity and certainty.’ As I emphasised in parliament, this should result in more innovation and predictability for the industry.

If you would like to discuss the issues raised above, please contact me on 01453 751572 or visit my website – www.neilcarmichael.co.uk.