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UK lawmakers reject 2030 power sector carbon target


BY CASSIE WERBER

LONDON -- An amendment to the U.K. government' s Energy Bill was narrowly defeated Tuesday, after lawmakers rejected a move to commit the country to near carbon emissions-free electricity generation by 2030.

Several lawmakers from the Liberal Democrat party, the junior partner in the coalition government, voted in favor of an amendment to the administration' s Energy Bill that was proposed by Conservative lawmaker Tim Yeo, chair of the Energy and Climate Change Committee, who contended that uncertainty over the introduction of carbon reduction targets was hampering investment.

"Doubts about whether a future government will stay committed to supporting low carbon technologies after 2020, fears that instead it will bet the farm on another dash for gas, and a lack of clarity…have all unsettled investors," Mr. Yeo said in a speech before the lower House of Commons.

Mr. Yeo used his speech to call on Liberal Democrat lawmakers to break with the government' s position that the amendment could restrict businesses at a difficult economic time, and support the amendment.

But the amendment was defeated by 290 votes to 267.

The Energy Bill, which is the government' s attempt to formalize its energy policy, contains several contentious areas. These include several measures designed to reform the electricity market, as well as policies that attempt to address the problems of pollution and climate change.

So far the government has shied away from setting a target for decarbonization, or discussing such a level before the next general election.

Mr. Yeo noted that postponing the decision until after the next election would introduce another element of uncertainty, and come too late for many investment decisions.

In March, one of the largest U.K. energy companies, SSE, said that it would shut 15% of its electricity-generating capacity because it had become unprofitable, and said that the government would need to provide more clarity on policy before it could take any further investment decisions.

Plans to move towards energy generation that produces much less carbon than coal, oil and gas, meanwhile, have also hit several obstacles.

The government is locked in talks with the company due to build the U.K.' s next wave of nuclear power stations, Electricite de France. The debate, which centers on the price that EDF would be guaranteed to receive for its energy, has put work on the reactors on indefinite hold.

The advance of shale gas technology in the U.S., meanwhile, has whetted the appetite of other countries for new, plentiful fossil fuel supplies.

George Osborne, the U.K. chancellor of the exchequer, said in his budget speech in March: "Shale gas is part of the future and we will make it happen."

But the "envious glances cast across the Atlantic" have contributed to lack of certainty needed for investment in the energy sector, Mr. Yeo said.

Dow Jones Newswires

 

06/04/2013

 

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