Introducing Emissions Performance Standards for power generation could play a key role in lowering the cost of the low carbon transition, E3G has argued in its response to the House of Commons Energy and Climate Change Committee inquiry into Emissions Performance Standards.
The response stresses that an Emissions Performance Standard (EPS) is a useful tool but not a silver bullet solution for decarbonisation. More fundamental electricity market reform in addition to an EPS will be necessary to ensure sufficient investment in low carbon power generation.
However, an EPS would provide greater certainty to investors on the future market opportunity for low carbon generation, by ensuring low carbon options are not undercut by high carbon generation. This will ensure that equipment providers for Carbon Capture and Storage (CCS) and other low carbon generation options begin investing in the technology development and supply chain capacity now that is necessary in order to begin deployment in 10-20 years time. Without this clarity for investors and development of supply chains, the overall costs of moving to a low carbon power sector will be significantly higher.
The consultation response also evaluates EPS proposals in the context of European policy developments, and identifies the strategic advantage to the UK of becoming an early mover. As the UK has a growing expertise in CCS technology, well-understood geological storage capacities and a near-term requirement for replacing generation capacity, the introduction of an EPS within the UK would provide strong signals for industrial development to be UK based, and may generate significant commercial opportunity for UK firms.