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UNA-UK Climate Change Conference, 30 April 2009 What are the prospects of expanding energy provision while reducing greenhouse gas emissions? Andy Limbrick Head of Environment Association of Electricity Producers Tel: 020 7930 9390

First thoughts We can increase energy provision while reducing greenhouse gas emissions, but: • Increased energy demand is not a given – we can reduce consumption by using energy more efficiently • UK electricity demand is falling because of economic recession – not the preferred solution • All sectors (e.g. transport, households, manufacturing) have a part to play in emissions reduction, not just power generation

Three pillars of energy policy The Energy White Paper of 2003 gave us 3 main drivers: • Competitive markets (to avoid over-pricing) • Environmental protection (to mitigate climate change) • Security of supply (to keep the lights on) The 2007 Energy White Paper strategy is: • Save energy • Develop cleaner energy supplies • Secure reliable energy supplies at prices set in competitive markets

Ambitious environmental goals The UK and EU have very ambitious (and legally binding) environmental targets: • 34% GHG reduction by 2020 (UK Budget 2009), 80% by 2050 – to demonstrate leadership • EU target 20% GHG reduction by 2020, or 30% if a new global agreement is achieved – negotiating position • EU target 20% renewable energy by 2020 (15% for UK) • UK looking at ~35% renewable electricity by 2020 (from a base of ~5% in 2007)

Power sector’s contribution How can the power sector play its part? • UK Committee on Climate Change (2008) envisages decarbonisation of the sector by 2030 • EURELECTRIC (2009) aims to be carbon neutral by 2050 • Keep all new-build, low-carbon options open – renewables, nuclear (~10 years away), Carbon Capture and Storage (~15 years away) • 30% of existing coal-fired power stations will close by 2016

Why keep all options open? Because aspiration is easy and delivery is challenging! There are practical problems with: • Planning consent • Grid connection • Bringing new technologies to market • Managing regulatory risk • Finance • Keeping the lights on during transition to low-carbon future In the mean time, gas-fired power stations are preferred

Meeting the challenge The power sector is at the forefront of improving energy efficiency and reducing emissions, but: • At least £100 billion of investment will be needed by 2020 • There must be a long-term, stable regulatory framework to encourage investment in new plant and new technologies • We need the flexibility to employ a range of technologies (including fossil fuels) during the transition to a lowcarbon future

Association of Electricity Producers The AEP is a trade association whose members include large, medium and small generating businesses, representing between them virtually all of the generating technologies used in the UK and the majority of the UK’s power production. They operate in a competitive electricity market and they have a keen interest in its success – not just in delivering power at the best possible price, but in meeting environmental requirements and expectations in respect of security and reliability of supply.

UK Generation mix (2005) Pumped Storage Imports 0.76% 3.04% Renewables 4.58%

Coal 33.97%

Nuclear 20.45%

Oil 0.60%

Gas 36.60%

Summary of nuclear closures 12000 10000


8000 6000 4000 2000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Year Sizewell B

Heysham 2


Dungeness B

Hunterston B

Hinkley Point B



Heysham 1


Plant closures under LCPD Coal Capacity opted in (MW)


Capacity opted out (MW)


To fit Flue Gas Desulphurisation (FGD) equipment to all opted-in capacity has cost ~ÂŁ2.1 billion.

Oil Capacity opted in (MW) Capacity opted out (MW)

0 4,300

Opted In 70.45%

Opted Out 29.55%

Projected electricity demand (TWh) Baseline 2005


Energy White Paper proposals 367.5







Future generation mix 2010

2020 Imports 4.35%

Imports Pumped Storage 0.84% 3.06% Renewables 9%

Pumped Storage 0.82%

Renewables 15.49%

Coal 19.29%

Coal 31.48% Nuclear 6.79%

Nuclear 18.94%

Oil 0.27%

Oil 0.56%

Gas 35.93%

Gas 52.99%

Andy Limbrick April 2009