The move to reveal contract-for-difference (CfD) strike prices comes as a surprise to the industry, which was not expecting to find out until next month, when the draft delivery plan for Electricity Market Reform is due. National Grid has yet to complete its modelling work on all the different scenarios for CfDs.
It follows on from yesterday’s Spending Review announcement, in which chancellor George Osborne was keen to promote investment in infrastructure.
“We’ll provide the certainty investors are crying out for in western countries,” said Osborne. “This country is already spending more on renewables than ever before. Now we’ll provide future strike prices for low carbon.”
Today’s announcement is not expected to cover the strike price for nuclear or carbon capture and storage. Negotiations between government and EDF Energy over the proposed Hinkley Point C nuclear power plant are ongoing.
Osborne said yesterday: “We’re restarting our civil nuclear programme when other countries are unable to continue theirs. Now we provide guarantees for new nuclear.”
The CBI welcomed the chancellor’s focus on capital spending, adding it was “critical” government publish a pipeline of projects. Director general John Cridland said: “Infrastructure is rightly singled out as the most effective engine for growth, as we urged. While the Government talks a good game on infrastructure we’ve seen too little delivery on the ground so far.”