SERIOUS MONDAY: UK ENERGY MARKETS OUTLOOK REPORT

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“We need to ensure the market delivers enough energy supply in five years’ time, ten years’ time, and in fifteen year’s time,” said Energy Minister Malcolm Wicks, as a new report was published into security of energy supplies.

The Energy Markets Outlook Report provided information, looking over a fifteen year time period, to help develop a shared understanding of the long-term outlook for energy supply and demand and explore and understand emerging risks that could affect the security of supply.

“Security of energy supply is one of the fundamental challenges this country faces.” stated Minister Wicks.

“We have one of the strongest and most diverse energy markets in the world which has seen many billions of investment. This includes proposals on the table for more than 14 gigawatts of new electricity generation capacity and quadrupling of our gas import capacity over the last few years. Decisions are being taken, the market is delivering investment, but we cannot let our guard down,” continued Wicks.

“Underpinning this is the need to move as quickly as reasonable possible towards a low-carbon economy. The sooner the world tackles climate change the better, both economically and environmentally. The best way of reducing emissions from energy is to use less. But whatever the exact composition of the future energy mix is, it must clearly involve a far greater role for renewable energy,” concluded Wicks.

The report highlighted key signals to the market including constructing electricity generation capacity, delivery of new gas capacity and planned new infrastructure and the ability to access additional sources of gas on a more flexible basis, the future use of other fuels- coal, oil and nuclear fuels is unlikely to be limited by resource availability, a continued need for skills and resources in the engineering and construction sectors, increases in the price of carbon to encourage investment in new low-carbon generating capacity in the long term, and greater deployment of renewable will have an important role to play in cutting carbon emissions.

The Energy Markets Outlook report was developed in conjunction with the energy regulator, Ofgem.

“The past couple of years have shown that competitive markets can deliver substantial investment in new and diverse energy supplies. But if investment is too late customers can suffer by having to cut production or deal with much higher prices to manage temporary shortages. We hope this report will help the energy industry and customers understand the risks and the need for investment in the future so they can take appropriate actions,” said Alistair Buchanan, Ofgem Chief Executive.

The report and an online resource can be found here.

Dawn

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