(Bloomberg) -- The UK plans to reform rules on planning and connecting to its power grid in hopes of spurring some £40 billion of investment a year through 2030 to try and eliminate fossil fuels from electricity generation.
The government on Friday laid out the most detailed plans yet for meeting its ambitions to push natural gas out of the country’s electricity mix in just six years time. It’s part of Prime Minister Keir Starmer’s efforts to use decarbonization to spur economic growth and cut energy costs.
The announcement comes as the country’s natural gas-fired power stations produced a record amount of electricity as winds dropped across Europe this week. Even if the government is successful in its aims, the UK will need to have even more on-demand power sources, most of it natural gas stations, available to run on windless days.
Still, the government is betting that pushing gas and its price volatility out of the power mix as far as possible will protect consumers from the high bills that have spurred a cost of living crisis in the country in recent years.
“The era of clean electricity is about harnessing the power of Britain’s natural resources so we can protect working people from the ravages of global energy markets,” Energy Secretary Ed Miliband said in a statement.
But the government appeared to backpedal on its ability to trim household energy costs. In its pre-election manifesto, the Labour Party had said it would “save families hundreds of pounds on their bills, not just in the short term, but for good.”
On Friday, it vowed only to provide “the foundation to build an energy system that can bring down bills for households and businesses for good.”
To accelerate new clean power generation and infrastructure upgrades, the UK will prioritize grid connections for projects best suited to contribute to the 2030 goal. That will take into account locations of facilities and the mix of generation technologies needed. It also plans to speed up planning and consenting for new transmission and distribution lines.
Ramping up offshore wind is critical to the government’s plan, which sees as much as 50 gigawatts of the technology by 2030, more than triple today’s level, but short of a previous pledge to quadruple the renewable power source by the end of the decade.
The plan announced Friday envisions the country contracting at least 12 gigawatts in the next two to three auctions to offer government-backed contracts for wind farms to sell power at fixed prices, known as contracts for difference.
The government will consult early next year on reforming those auctions to attract more capacity, including increasing the length of contracts and easing eligibility requirements to participate.
--With assistance from Eamon Akil Farhat.
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