Chris Huhne is today expected to provide fresh details on how the coalition government will impose a 'floor price' on carbon emissions designed to bolster the economic case for low carbon renewable, nuclear and carbon capture and storage projects.The Energy and Climate Change Secretary will unveil the government's first National Policy Statement on Energy at an event at Hinkley Point nuclear power station, in a move that is expected to provide further clarity on a wide-range of the government's energy policies.In particular, the statement will include details on how the government plans to make good on its coalition agreement pledge to provide a stable 'floor price' for carbon that would provide low carbon investors greater certainty.Investors in new nuclear plants and CCS projects have been waiting anxiously to find out what level the carbon floor price will be set at and how it will be imposed.According to industry insiders the carbon price will have to reach around 80 a tonne to make it possible for new nuclear reactors to compete economically with coal-fired power plants. However, the price of carbon under the EU emissions trading scheme has been hovering below 15 a tonne for much of the past year and it remains to be seen how the British government will move to impose a floor price when the current price is delivered through the EU-wide carbon market.It is also unclear if the government will announce the precise floor price it intends to impose or when it plans to bring the floor price into effect, particularly given that any significant increase will lead to a hke in energy bills.The Sunday Times reported yesterday that one option being considered by the Department of Energy and Climate Change was to introduce a lower floor price over the next two years, which would then be increased gradually over the next decade as new nuclear plants and CCS projects come online.Energy investors, including leading utilities such as EDF, RWE and E.ON who are all working on plans for new nuclear reactors, have been growing increasingly frustrated over the lack of clarity around the proposed floor price and will be hoping that today's announcement gives them the certainty they need to move forward with their plans.The Sunday Times also reported that the government will confirm that it will not back plans for a large scale tidal barrage across the Severn Estuary.Developers have argued since the seventies that such a barrage could provide up to five per cent of the UK's electricity, but reports earlier this summer suggested the coalition is opposed to the project on the ground of the estimated 33bn price tag and fears it will danage the estuary's natural habitat.However, the policy statement is expected to confirm that smaller tidal energy projects that could be built in the estuary without government subsidy could still get the go-ahead. According to reports, two consortia are continuing to work on plans for tidal turbine systems, one involving Rolls Royce and Atkins and the other featuring Halcrow, Arup and KPMG. Government today expected to provide some much needed clarity with release of National Policy Statement on Energy
Outlet: Computing.co.uk
