1 Introduction
1. The Coalition Agreement contained a commitment
to establish an emissions performance standard (EPS). This will
prevent coal-fired power stations being built unless they are
equipped with sufficient carbon capture and storage to meet the
required standard. In July 2010, the Secretary of State, Rt Hon
Chris Huhne MP, announced that the electricity market reform project
would hold a consultation in the Autumn of 2010 to consider, among
other things, the role that an EPS could play in delivering an
energy system that delivers secure, low carbon and affordable
electricity for the 2020s and beyond.[1]
2. For our first inquiry, we decided to look at emissions
performance standards, focusing particularly on the potential
impact on energy markets and investments, and examining whether
they could encourage the deployment of carbon capture and storage
(CCS) technology. We also looked at the consequences and opportunities
at an international level, especially with regard to international
climate change negotiations.
3. We announced our inquiry on 21 July 2010 and sought
evidence on:
- the factors that ought to be
considered in setting the level for an EPS, what an appropriate
level for the UK would be and whether it should be changed over
time;
- the benefit an EPS would bring beyond the emissions
reductions already set to take place under the EU Emissions Trading
System (ETS);
- the effectiveness of an EPS in driving forward
the development of CCS technology;
- the possible threats posed by an EPS to the UK's
long-term energy security and climate change agendas;
- the likely impact of an EPS on domestic energy
prices;
- whether any other European countries are considering
an EPS and if so, whether standards should be harmonised;
- whether unilateral action by the UK to introduce
an EPS could contribute towards global climate negotiations in
Cancun in November 2010; and
- whether greater use of EPSs internationally could
help to promote agreement on global efforts to address climate
change.
4. We received written evidence from 35 individuals
or organisations and held two oral evidence sessions in which
we heard from: Lord Turner and Dr David Kennedy of the Committee
on Climate Change; Professor Jon Gibbins of University of Edinburgh;
Nick Molho of WWF; Simon Skillings of E3G; Chris Littlecott of
Green Alliance; Dr John McElroy of the Association of Electricity
Producers; Matthew Farrow of the CBI; Dr Jeff Chapman of the Carbon
Capture and Storage Association; Charles Hendry MP, Minister of
State at the Department of Energy and Climate Change (DECC); and
Jonathan Brearley, Director of Energy Markets and Infrastructure,
Energy Strategy and Future, DECC. We are very grateful to all
those who have assisted us during the inquiry.
1 HC Deb, 27 July 2010, col 868 Back
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