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The UK Experience


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Presented by Andrew Walker, former Director of the UK Office of Gas and Electric Markets

Presented by Andrew Walker, former Director of the UK Office of Gas and Electric Markets

Published in: Business, Technology
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  • 1. The UK Experience Clean Energy, Good Governance and Regulation Andrew Walker – March 2008
  • 2. 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?
  • 3. 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
  • 4. 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
  • 5. 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
  • 6. 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
  • 7. 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
  • 8. 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
  • 9. 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
  • 10. 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