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Overseas investors join in criticism of UK energy bill Overseas investors join in criticism of UK energy bill
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Two large overseas investors in the UK energy market have joined the chorus of criticism of the government's new energy bill.Two large overseas investors in the UK energy market have joined the chorus of criticism of the government's new energy bill.
The Germany-based E.ON, one of the big six electricity providers in Britain, said national subsidy schemes for renewables like the UK's contracts for difference had helped "bust" key European carbon reduction initiatives. The German-based E.ON, one of the big six electricity providers in Britain, said national subsidy schemes for renewables such as Britain's contracts for difference had helped "bust" key European carbon reduction initiatives.
And Norway's Statkraft, said on Wednesday it would not be able to press the button on a giant £30bn offshore wind farm on the Dogger Bank until ongoing "uncertainty" was lifted.And Norway's Statkraft, said on Wednesday it would not be able to press the button on a giant £30bn offshore wind farm on the Dogger Bank until ongoing "uncertainty" was lifted.
Speaking at a climate change symposium in Svalbard, Norway, E.ON's chief executive, Johannes Teyssen, said: "We started the ETS [emissions trading system] with a lot of noise but we never took care of it. National policies took over and the ETS is bust." He pointed to Britain's "contracts for difference" scheme introduced by the energy bill as an example of how national governments were going their own way.Speaking at a climate change symposium in Svalbard, Norway, E.ON's chief executive, Johannes Teyssen, said: "We started the ETS [emissions trading system] with a lot of noise but we never took care of it. National policies took over and the ETS is bust." He pointed to Britain's "contracts for difference" scheme introduced by the energy bill as an example of how national governments were going their own way.
Teyssen said renewable energy regimes throughout the EU should be made "coherent and consistent" with ETS so that the cap and trade scheme can be revitalised. There was no investor anywhere who would put money into wind or solar schemes on the basis of the ETS, he said, adding that the collapse in the price of carbon in that scheme had left power companies burning coal as much as possible.Teyssen said renewable energy regimes throughout the EU should be made "coherent and consistent" with ETS so that the cap and trade scheme can be revitalised. There was no investor anywhere who would put money into wind or solar schemes on the basis of the ETS, he said, adding that the collapse in the price of carbon in that scheme had left power companies burning coal as much as possible.
Germany last year produced more electricity from renewable power sources than ever before – 20% of the total. "But guess what?" Teyssen said. "How much less was the Co2 output? It was 6m tonnes more because of all the coal being burned as the 80% got dirtier and dirtier." Germany last year produced more electricity from renewable power sources than ever before – 20% of the total. "But guess what?" Teyssen said. "How much less was the CO2 output? It was 6m tonnes more because of all the coal being burned as the 80% got dirtier and dirtier."
Teyssen said the way forward was for the EU to set clear goals for carbon reduction 50% by 2050 and then work backwards down to goals for next year. The ETS should then be reinvigorated by auctioning off carbon certificates designed to achieve those goals.Teyssen said the way forward was for the EU to set clear goals for carbon reduction 50% by 2050 and then work backwards down to goals for next year. The ETS should then be reinvigorated by auctioning off carbon certificates designed to achieve those goals.
Hans van Steen, head of renewable energy regulation at the European commission, said he did not accept the ETS was "bust", but admitted at the same symposium that "something needs to be done".Hans van Steen, head of renewable energy regulation at the European commission, said he did not accept the ETS was "bust", but admitted at the same symposium that "something needs to be done".
Christian Rynning-Tønnesen, chief executive of Statkraft, said a lot more detail would be needed before the wind farm developer could decide whether to make enormous new investments in projects such as the deep water Dogger Bank scheme planned with fellow big six utility firm SSE and others.Christian Rynning-Tønnesen, chief executive of Statkraft, said a lot more detail would be needed before the wind farm developer could decide whether to make enormous new investments in projects such as the deep water Dogger Bank scheme planned with fellow big six utility firm SSE and others.
"There is still uncertainty in the market over contracts for difference. The mechanism has been described but what exactly is going to be the price. That remains to be seen."There is still uncertainty in the market over contracts for difference. The mechanism has been described but what exactly is going to be the price. That remains to be seen.
"Also it is not clear in the proposals what regime will be available [in schemes such as Dogger] far out to sea."Also it is not clear in the proposals what regime will be available [in schemes such as Dogger] far out to sea.
Statkraft is putting the final touches to its £1.2bn Sheringham Shoal facility off the coast of Norfolk.Statkraft is putting the final touches to its £1.2bn Sheringham Shoal facility off the coast of Norfolk.
But the giant Dogger Bank project will be the real test of whether the UK can proceed with the deep water Round 3 projects. With 9,000 megawatts of power planned, it would produce more than double the output of Britain's biggest power station Drax. But the giant Dogger Bank project will be the real test of whether Britain can proceed with the deep water Round 3 projects. With 9,000 megawatts of power planned, it would produce more than double the output of Britain's biggest power station Drax.