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Coming Clean over Dirty Fuels

18 December 2015 | Updated 01 January 1970

The UK government has come in for criticism for its allocation of contracts for energy supply that appears to favour power suppliers that use fuels such as diesel which some see as contradicting its commitment to greener alternatives.

The government published the results of its ‘auction’ at the end of last week and it was clear that no new gas plants would be included in the capacity market deal.

In its defence, the DECC stated that the deal has resulted in 46.35GW of power at a price of £18/KW, lower than the price reached during the first capacity auction last year. Gas, coal and nuclear plants operating now have received contracts and operators of large cables or interconnectors carrying power between the UK and continental Europe have been winners as well.

The ‘capacity market’ was developed by the Cameron government to guarantee that the nation’s electricity supply requirements are met and at a price it believes are fair to the end user.

However, environmental groups have responded with dismay and accused the government of a completely contradictory if not hypocritical stance over how it has allocated subsidies to the scheme. Not surprisingly Greenpeace UK has led the view that the DECC has chosen some strange bedfellows to meet the policy of keeping the lights on. “With the exception of the coal phase-out, the gap between what this government preaches and what it actually does on climate and energy keeps getting wider and wider, complained Doug Parr, Chief Scientist, Greenpeace UK. A twenty-first-century advanced economy like Britain shouldn't have to rely on pop-up diesel farms and moribund coal plants to keep the light on.”

The Guardian newspaper has calculated that diesel farms have won subsidy contracts totalling £150 million and Greenpeace itself claims one energy company that was only open for business this year, received over £35 million to build new diesel farms.

The National Grid believes that this auction will cost £834 million in subsidies in 2019/20. Despite this, the government gave a robust defence of its scheme. "This result represents a good deal for customers – fierce competition in the capacity market has driven down costs, meaning future capacity has been secured the lowest price possible," argued Andrea Leadsom, Energy Minister.

Picture: The nation’s electricity needs have been met argues the government, even though the biggest winners may be polluting diesel power stations

Article written by Mike Gannon | Published 18 December 2015


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