Energy policy changes are needed to hit key 'green' targets, Government told

Urgent policy changes are needed to encourage the £200bn development of wind farms, nuclear power and other forms of renewable energy to reduce costs and carbon emissions the Government was told yesterday.

By Roland GribbenPublished: 7:47PM BST 12 Oct 2009

The Committee on Climate Change made it clear that without intervention in the market place to change pricing rules and provide other incentives to accelerate development of low cost, low carbon generation, the Government risks missing one of its key 'green' targets.
Lord Turner, chairman and the other members of the independent committee, echo warnings from Ofgem, the gas and electricity industry regulator, about the "significant costs and risks" linked to the huge investment needed in renewable energy to reduce emissions from electricity plants by 50pc. The committee's annual report to parliament says the renewable risks and costs should not be accepted.

It wants the Government to consider a range of options for intervention in the power market. The report says support for selected technologies should be extended to cover the full range of renewable and low carbon power systems to cut costs and ease worries about supply security.
The committee questions whether the market will deliver the forecast 30,000 megawatts of onshore and offshore wind power, two or three new nuclear power plants and four pilot clean coal stations needed to replace dirty energy with clean energy by 2020 to meet emission targets without a policy rethink. Suggestions include strengthening carbon price signals and extending the exemption from the climate change levy to all new low carbon energy sources.
The report acknowledges changing market rules could take time but says discussions with energy companies, analysts and academics suggest the current set-up will not deliver a low carbon power generation system through the 2020s. The committee expresses particular concern about the development of wind power, clean coal and warns of the risks of power suppliers opting to build more gas-fired plants using imported fuel unless the uncertainties are addressed.
Offshore wind generation could be handicapped by weaknesses in the turbine market. The market for sub-sea cables is said to be undeveloped while only two of the 12 vessels needed to instal wind turbines by 2020 are operational.
It is estimated £15bn will be needed to develop an offshore transmission network to carry the power generated by a more ambitious wind power programme. The committee is relatively relaxed about the timetable for the modest nuclear power programme but is concerned about the risks of planning, regulatory delays and shortages of specialist staff.
The Tory Party has tried to distance itself from reports that Lord Turner, (right) chairman of the FSA and an adviser to Gordon Brown, is being lined up for a senior Bank of England appointment if they win the next election. A spokesman said George Osborne, shadow chancellor, "Has absolutely not started handing out jobs to anyone."