At last week’s Spectator energy conference Michael Fallon appeared to steer government policy away from green ideology and in a more business and consumer-friendly direction. But there was to be a nasty sting in the tail. Shortly afterwards Ed Davey’s Department for Energy and Climate Change changed the rules on something called Final Investment Decision (FID) enabling. The direct result is that the UK could lose a Yorkshire power station which is responsible for generating 4% of the country’s electricity. Given that the reserve margin between maximum generating output and peak demand is projected to fall to just 2 per cent in the winter of 2015/16, we are back under the threat of blackouts.
The purpose of FID enabling is to encourage power-providers to invest in green energy by guaranteeing them a strike price – thereby ensuring a certain return on what can be very uncertain investments.
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