Sian Crampsie
The UK government hopes that planned reforms to the country's capacity market will encourage more investment in energy infrastructure.
The Department of Energy and Climate Change (DECC) has set out a series of changes to the capacity market that are designed to improve long-term energy security and "tackle the legacy of underinvestment", it said.
"The capacity market has driven down costs and secured energy at the lowest possible price for bill-payers, but I'm taking further action to tackle the legacy of under-investment and ensure our country's long-term energy security," said Amber Rudd, Energy Secretary.
The proposed reforms include plans to buy more electricity capacity and buy it earlier to encourage investment, and to bring forward the start of the capacity market by one year.
The UK designed its capacity market in 2014 and has so far held two auctions for capacity to be delivered in 2018/19 and 2019/2020. The government conducted a review of the system to ensure that it remains fit for purpose and brings investment in new gas-fired power plants.
Campaign group WWF said that the proposals were further evidence of the UK's "piecemeal" and incoherent approach to energy policy, while business group CBI said the reforms were "good news".
"Getting the details of these reforms right are key to guaranteeing security of supply at an affordable cost, as well as supporting much needed investment in new generation," said Matt Sheldon, CBI head of energy and climate change. "It's crucial that business and the government work together on this challenge."
Lawrence Slade, chief executive of Energy UK said: "With the phasing out of coal, the capacity market is the right mechanism to bring forward new investment to ensure customers have electricity any time they need it.
"Government's proposed reforms, including the increase in capacity, the tighter delivery incentives and bringing forward the first capacity market delivery, are the right steps to guarantee future energy security based on new flexible capacity."
The UK government has pledged to close all of the country's coal-fired power plants by 2025 and wants investment in new nuclear and gas-fired power plants to secure capacity. However delays to proposed new nuclear power plants and low energy prices have raised concerns about a looming supply gap.
"Rather than announcing yet another sticking plaster solution to try and bring forward new fossil fuel plants, the government needs to look at the system as a whole, concentrating on maximising renewable generation, and encouraging far greater provision of electricity demand reduction, demand side response and storage," said Rebecca Williams, Power Sector Specialist at WWF UK. "Only this will ensure a modern and resilient energy system."
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