Huhne outlines electricity market reform

mattEnergy Efficiency, Utilities Market Regulation, Wholesale Utilities Markets

UK Energy Secretary Chris Huhne unveiled proposals set to bring about the biggest reforms since privatisation.

Chris Huhne

The UK government announced on Tuesday that the UK’s energy infrastructure will need £110bn of investment to keep the lights on.

Chris Huhne told parliament that without reform and substantial financial investment, the country will be facing blackouts.

“Without reform, our reserve capacity will fall to uncomfortable levels and there is a much higher risk of blackouts by the end of the decade”, Huhne said.

With a quarter of the country’s generation capacity shutting down over the next decade, the quoted £110bn is intended to build 20 large new power stations, and upgrade the ageing national grid.

One part of the reform will see companies given long-term contracts on stable prices for energy generated from low carbon resources such as nuclear or renewables.

The deals are intended to give investors the certainty required to invest in the construction of low carbon generation such as nuclear plants or wind farms.

The DECC have predicted that the reforms will add around £160 to bills by 2030. They are set to come into effect by mid-2013.