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Energy first, say bosses

Enabling investment in energy infrastructure must be the government’s priority as it debates how to balance the country’s budget.

This was the view expressed by 14 of the construction industry’s leaders gathered at the first NCE More for Less round table meeting this week.

The round table met to thrash out what infrastructure priorities should be as chancellor George Osborne prepares to make 25% budget cuts across government departments in his Comprehensive Spending Review in October.

Each panel members had their own project to promote as priorities for government funding - in road, rail, water and airports. But all agreed that the biggest economic benefit could be gained from a move which will require the least public sector cash.

This was to set an attractive carbon floor price that would trigger tens of billions of pounds of private sector investment in the energy sector. A higher carbon floor price would make investment in fossil fuel and gas power stations less viable as operators would have to pay a higher levy on carbon emissions.

Filling the energy gap

“At the moment the nuclear sites are competing with imported gas as the way to fill the energy gap,” said Balfour Beatty chief operating officer Andrew McNaughton.

“Agreeing the carbon floor price is vital to pump prime investment that will keep the infrastructure sector busy and create jobs around the country,” he said. “It will open the way for private investors to invest in energy.”

Energy saving initiatives will not reduce demand for electricity, said National Grid major projects manager David Mercer.

“Smart Grid initiatives will make it possible to spread the pattern of demand around to helpful times of the day, but we still expect increased demand overall in the medium to longer term” he said. 

“We see under the gone green scenarios a gradual increase in demand for electricity from 2020 as carbon targets push major consumers towards clean electricity for heating and power supplies.”

A full report on the round table discussion will appear in NCE 15 July. There will be further More for Less discussions leading up to the Infrastructure Show in October.

  • Attendees at the round table: Andrew McNaughton (Balfour Beatty), Andy Milner (Amey), David Tarrant (Gifford) and Peter Hansford (Nicholls Group). Also present wereSimon Kirby (Network Rail), Phil Wilbraham (BAA), John Russell (Infrastructure UK), Phil Stride (Thames Water), Sue Housley (Highways Agency), David Mercer (NationalGrid), Peter Sutcliffe (Scott Wilson), Richard Williams (Mott MacDonald), Stephen Wells (Costain), Brian Fitzpatrick (EC Harris). Chairman was Antony Oliver (NCE)
  • Decentralisation minister Greg Clark has confirmed that the Infrastructure Planning Commission will be abolished. It will be replaced with a Major Infrastructure Planning Unit (MIPU) in the Planning Inspectorate to continue fast-tracking major infrastructure projects like offshore wind farms and nuclear power stations.

Readers' comments (1)

  • As a young electrical engineer I was taught that the UK had an 'Infiite Electricity Grid'. The momentum of large generators would supply any sudden demands,e.g. 'Faults'. Our move to multiple small generators, e.g wind, may seem green but without momentum green can easily turn to 'Brown Out'. A single 400KV fault could cause a dip all electricity in the UK. A large dip would shut down computers across the country. We need Drax and the other large power stations to maintain the momentum of the grid. Guaranteed generation powered by waste, nuclear,biomass,coal,oil, is essental to keep the lights on. Wind may seem green but in must be seen as a 'Top Up' to our real sources of electricity. Without electricity the UK economy will just wither and die. I agree with the findings of this panel. A secure source of energy is essential and a clear government statement of its future policy on energy is needed now. Denying the £80m loan to Sheffield Forgemasters sent out the wrong message.

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