Supplier Reaction to the Government Energy Review

Abstract

Introduction

Uncertainty surrounding the UK' s future energy policy framework continues to hamper investment and undermine the UK' s drive to curb carbon emissions. This brief assesses the opinion of key energy industry stakeholders on whether new nuclear builds are the solution and how they should be funded. The brief also assesses the attitude energy executives to Europe' s flagship Emissions Trading Scheme.

Scope of this report

• An overview of industry opinion on the measures set out in the Energy Review designed to cut UK emissions in the short and long-term.
• An in-depth analysis of how different stakeholder groups believe the UK should fund the construction of a new fleet of nuclear power stations.
• Examination of the differing attitudes toward the EU Emissions Trading Scheme and its future impact in the UK energy sector.
• Assessment of the impact that the Energy Review report has had on shaping industry attitudes and opinions.

Research and analysis highlights

Utilities are the greatest proponents of a nuclear power driven cut in UK carbon emissions. While regulators are less enthused by the prospect of new atomic builds, this option garners the greatest consensus amongst all stakeholders. The future price of carbon remains, however, a key intangible in the profitability of nuclear power plants.

The UK energy industry favours state support of some kind for nuclear builds, particularly towards clean up costs, but the degree to which the Government should be involved varies garners little consensus. While regulators favour a ' managed' market approach, network operators are more enthusiastic about direct state involvement.

UK regulators are bullish on the need for a uniform ETS allocation process to ensure the UK is not disproportionately penalised. They are also the most sceptical stakeholder group towards the ETS mechanism in general, especially regarding the need for the UK, as a mature economy, to bear the brunt of emission curbs.

Key reasons to read this report

• Identify the varying attitudes of energy industry stakeholders to the future of nuclear power generation in the UK.
• Gain insight into the perceived strengths and weaknesses of Europe' s Emissions Trading Scheme and the future direction of carbon prices.
• Evaluate the success of the Review report in shaping industry attitudes toward future UK energy policy.