Regulating emissions from fossil fuel stations

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This is not a formal consultation. **

Please share this information with colleagues and stakeholder organisations who may be interested.

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Email: elec.marketreforms@decc.gsi.gov.uk

On 12 July 2011, the Government published Planning our electric future: a White Paper for secure, affordable and low-carbon electricity. The White Paper sets out key measures to attract investment, reduce the impact on consumer bills, and create a secure mix of electricity sources including new nuclear, renewables and carbon capture and storage.

One of the key measures set out in the White Paper is the Emissions Performance Standard (EPS), to provide a regulatory backstop on the amount of emissions new fossil fuel power stations can emit.

As announced in the White Paper, the Government will continue to work with stakeholders to develop the detail of key aspects of the implementation of the proposed EPS regime. We are now inviting further views and evidence in the following areas:

• Grandfathering: Creating sufficient certainty for investors is a key objective of the reforms, not least for the new gas plant we will need in the next few years to replace capacity closing. Gas will also increasingly be needed as back-up for intermittent renewable generation. In order to provide certainty under the EPS, the White Paper set out that the Government will give plant a guarantee on the level of the EPS, so that any changes will not apply to plant consented under the framework for a clear and predetermined period. We are now seeking further views and evidence on what this ‘grandfathering’ period should be, and how to implement it in a way tht provides sufficient certainty for investment in new plant.
• Upgrades and life extensions: While the Government intends that the EPS will not apply to plant consented before it is legislated for, the White Paper set out that the Government considers it appropriate that plant undergoing significant life extensions or upgrades fall within the EPS regime. We are now seeking further views and evidence on what should constitute such an upgrade or life extension, and how it should be applied.
• Exemptions for plant in the CCS Demonstration Programme: To allow sufficient flexibility to demonstrate the range of CCS technologies, specific exemptions will be given to plant forming part of the UK’s CCS Demonstration Programme or benefiting from European funding for commercial-scale CCS. We are seeking further views and evidence on the scope of these exemptions and how to implement this exemption in practice.

Please send us your views, along with any evidence, to elec.marketreforms@decc.gsi.gov.uk by Monday, 31 October 2011.

1. The consultation on Electricity Market Reform was published on 16 December 2010 and ran until 10 March 2011.
2. Following an HM Treasury consultation on a carbon floor price, also published on 16 December 2010, the Chancellor announced in Budget 2011 the carbon floor price will start at around £16 per tonne of carbon dioxide in 2013 and move to a target price of £30 per tonne in 2020.
3. Planning our electric future: a White Paper for secure, affordable and low-carbon electricity, was published on 12 July, with the Emissions Performance Standard details in Chapter 2.4.
4. The consultation on the capacity mechanism was published alongside the White Paper on 12 July and closes on 4 October. Enquiries on the capacity mechanism consultation can be directed to:

Matt Wieckowski
Department of Energy & Climate Change
4th Floor, Area D
3 Whitehall Place
London, SW1A 2AW
Tel: 0300 068 5101
Email: DECC.capacity.mechanism@decc.gsi.gov.uk

1. As signalled in the White Paper, we have now published the non-confidential responses to the EMR consultation, which ran 16 December 2010 to 10 March 2011.