Nuclear and renewable energy received a Budget boost last week with the unveiling of a new carbon floor price, a move that is expected to sound the death knell for coal power.
The government’s decision to become the first country to establish a carbon floor price within the European Union’s (EU’s) emissions trading scheme (ETS) was welcomed by big utilities like EdF and Centrica because it gives more certainty on their investments.
The announcement coincides with the ongoing problems at the Fukushima power plant in Japan which have highlighted nuclear safety issues and prompted reviews in several EU countries including the UK (see NCE 17 March)
“For EdF it’s perfect,” said EC Harris partner Mark Stewart. “It gives them a guarantee on the carbon price until 2020 when the new plants will begin to come on line.”
The UK has set the price at £16 per tonne in 2013 and rising to £30 by 2020 to emit carbon. Current trading price is E16.80 (£14.78).