UK accelerates clean energy to protect against fossil fuel price shocks
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[LONDON] Britain will launch a package of measures on Tuesday to accelerate the growth of renewable power and reduce the country’s reliance on fossil fuels which have soared in cost due to the conflict in Iran, the government said.
The government said it will also announce steps to tackle the link between gas and electricity prices, a feature of the energy market that is blamed for Britain having some of the highest electricity prices in the world.
Britain’s Labour government has said it sees the energy transition as a way to fuel much-needed economic growth, and is under pressure to meet an election pledge to cut energy costs for households.
‘Era of fossil fuel security is over’
“As we face the second fossil fuel shock in less than five years, the lesson for our country is clear: The era of fossil fuel security is over, and the era of clean energy security must come of age,” Energy Secretary Ed Miliband will say at an event, according to sections of his speech released by his ministry.
Domestic energy prices are poised to soar from July - as the regulator’s price cap enters a new pricing quarter from July to September - due to surging wholesale gas costs, which are currently 30 per cent higher than before the Iran conflict began.
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The government will announce plans to boost renewable power generation such as solar panels and wind turbines on public land which it said could unlock up to 10 gigawatts of electricity, enough to power around 5 million homes.
It will look to streamline rules to make it easier to build renewable projects and connect them to the power grid and to explore ways to allow companies to build their own grid connections.
It will also seek to make it easier for people to install electric vehicle chargers, solar panels and heat pumps at home.
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Decoupling electricity prices from gas
Miliband and finance minister Rachel Reeves will announce steps to “delink” the price of electricity from the price of gas, the government said, without going into more detail.
The wholesale price is set every 30 minutes by the cost of the last energy source used to ensure demand is met. So even if wind, solar and nuclear provide 99 per cent of the power needed, if gas-fired plants are needed to make up the last 1 per cent, then gas sets the price for every buyer and seller.
Gas-fired power plants are the biggest single source of the country’s electricity, and can react quickly to demand, so end up setting the price most of the time. REUTERS
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