the uk experience
DESCRIPTION
Presented by Andrew Walker, former Director of the UK Office of Gas and Electric MarketsTRANSCRIPT
The UK Experience
Clean Energy, Good Governance and Regulation
Andrew Walker – March 2008
What is Clean Energy? Renewables - bio-fuels, cost effectiveness,
implementation or development? Nuclear- what about the waste? Carbon capture and storage- will it work on a large scale?
UK Experience – Clean Energy Renewables – in 2006 about
5½GW of capacity generating about 5½ per cent of electricity
Nuclear – in 2006 about 11GW of capacity generating about 19 per cent of electricity
UK Experience - Strengths Early commitment to renewable
energy with the introduction of the NFFO in 1990
Political consensus – support for renewable energy, Stern Review and White Paper on Nuclear Power
Resource base for renewable energy – Severn Barrage 8½GW and offshore wind +200GW
UK Experience - Weaknesses Lack of coordination between
government energy policy, the planning regime and energy regulation
Design of the arrangements to support renewable energy
The focus of energy regulation is competition / regulation of natural monopoly – not the environment
Coordination Issues The planning process led to the
approval of a relatively large number of small scale onshore wind farms
This led to growing public dissatisfaction with visual intrusion
A relatively small number of large onshore wind farms would have been more effective
Support Mechanisms NFFO – regulator picked schemes on
the basis of cost effectiveness, but few actually got built
RO – obligation on suppliers and if they do not deliver they must make buyout payments, complex and volatile, has not promoted the development of Severn Barrage or offshore wind
Energy Regulation (1) Bi-lateral trading arrangements
and imbalance settlement unhelpful for renewable energy
No strategic consensus with Government
Long on rhetoric and short on action
Energy Regulation (2) Abolished deep connection charges
for distributed generation but introduced use of system charges
Key initiatives on offshore wind, transmission capacity, distributed generation and micro-generation led by Government and not the regulator
Conclusions The challenge of climate change is so
great that it is likely renewable, nuclear and CCS will all need to be developed
Coordination between Government agencies within and between countries essential
Regulation needs to fully take account of the changing strategic landscape