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Axe carbon tax to keep lights on and cut energy bills, says ScottishPower chief

The Telegraph|Emily Gosden|December 8, 2013
United Kingdom (UK)Energy Policy

Keith Anderson, chief corporate officer, warns that the “carbon price floor” (CPF), which taxes companies for burning fossil fuels, will make Britain’s remaining coal plants “largely uneconomic by around the middle of the decade”. With Britain’s spare power margin already forecast to fall as low as 2pc by 2015, the carbon tax will force more closures and “threatens to make us even more vulnerable to the risk of blackouts”, he warns.


ScottishPower says tax will force coal plants to shut too soon and push up bills

Britain's unilateral carbon tax should be scrapped before it causes blackouts, pushes up household bills and makes the UK uncompetitive, ScottishPower argues.

Keith Anderson, chief corporate officer, warns that the “carbon price floor” (CPF), which taxes companies for burning fossil fuels, will make Britain’s remaining coal plants “largely uneconomic by around the middle of the decade”.

With Britain’s spare power margin already forecast to fall as low as 2pc by 2015, the carbon tax will force more closures and “threatens to make us even more vulnerable to the risk of blackouts”, he warns.

Writing in Monday’s Telegraph, Mr Anderson also calls for a review of Britain’s £12bn programme to install “smart” electricity and gas meters in every home, suggesting costs should be cut to reduce the impact on consumer bills.

Several coal-fired power plants have already shut this year under EU rules to help curb acid rain and ... more [truncated due to possible copyright]

     

ScottishPower says tax will force coal plants to shut too soon and push up bills

Britain's unilateral carbon tax should be scrapped before it causes blackouts, pushes up household bills and makes the UK uncompetitive, ScottishPower argues.

Keith Anderson, chief corporate officer, warns that the “carbon price floor” (CPF), which taxes companies for burning fossil fuels, will make Britain’s remaining coal plants “largely uneconomic by around the middle of the decade”.

With Britain’s spare power margin already forecast to fall as low as 2pc by 2015, the carbon tax will force more closures and “threatens to make us even more vulnerable to the risk of blackouts”, he warns.

Writing in Monday’s Telegraph, Mr Anderson also calls for a review of Britain’s £12bn programme to install “smart” electricity and gas meters in every home, suggesting costs should be cut to reduce the impact on consumer bills.

Several coal-fired power plants have already shut this year under EU rules to help curb acid rain and pollution. About a dozen plants remain operational and provide about 40pc of UK power; ScottishPower’s own Longannet coal plant powers about one-quarter of Scottish homes.

But a combination of further EU rules and the carbon tax, which increases steeply every year, means most of these coal plants may be forced to close by 2015 or 2016.

“Abolishing the CPF, or freezing it at the current rate, would help to reduce upward pressure on bills, improve UK competiveness and help in cost effectively maintaining security of supply,” Mr Anderson says. “We estimate that abolishing it could save some £33 from a typical dual fuel bill in 2015/16; freezing it at the current rate from April 2014 would save around £24.”

Manufacturing bodies and consumer groups both attacked the Chancellor for failing to cut or scrap the carbon tax in last week’s Autumn Statement, despite the Prime Minister's pledge to “roll back” green levies.

Mr Anderson also calls for other changes to reduce customer bills, including “a careful review” of the £12bn programme to install meters that send automatic gas and electricity usage readings back to suppliers. His comments come as both EDF and Centrica called for greater co-operation between politicians and companies to address rising bills and keep the lights on.

Ministers hope new wind farms and gas plants will replace old coal plants but investment in both is stalling amid policy uncertainty.

The Government wants some coal plants to convert to burn biomass instead and is offering subsidies for plants to do so. The giant Drax and Eggborough coal-fired power stations are both pursuing this option. However, Eggborough’s plans are now in disarray after ministers announced last week an annual cap on subsidies, which appears too low for both projects to go ahead.

Eggborough, which supplies about 4pc of UK power, hoped to start conversion in January but is now waiting to find out whether it will get the necessary subsidies.

Neil O’Hara, Eggborough’s chief said: “The carbon price floor means just at a time where the UK desperately needs to keep capacity on the grid, it becomes very difficult to see... whether it will be economic to run past 2015.

“It’s a race against time for affordable, shovel-ready projects like Eggborough to convert [to biomass]. Time is running out and the signals from Government are currently highly contradictory.”


Source:http://www.telegraph.co.uk/fi…

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