Over £110BN of investment is to be secured over the next 40 years to build new nuclear plants as well as renewable offshore wind power, it was announced by energy secretary Chris Huhne in the government’s Electricity Market Reform White Paper, which was published this week.
Building reported that the investment is required to shift the UK economy away from a ‘high risk, high carbon’ future towards creating a mix of electricity sources including gas, nuclear, renewables, carbon capture and storage. It also stated that that the investment will be needed to build 20 new nuclear power stations and upgrading the grid, as a round one quarter of the UK’s coal and old nuclear capacity will be phased out over the next ten years. It also includes contracts for difference, which guarantee a fixed income for energy companies investing in low carbon production.
However, while the news was welcomed by contractors Amec and EDF, there is concern from the industry that the plans do not do enough to boost short-term construction work, Construction News reported. PwC director Ronan O’Regan said the industry required further clarity on the guaranteed energy prices before it could make the necessary investment- otherwise the government could expect projects being delayed.
But there were real opportunities in renewables, Construction News stated, with an anticipated £93BN being invested as the Crown Estate develops its offshore sites. Energy adviser Douglas-Westwood stated that contractors would be stepping-up bids in order to secure these lucrative contracts. Douglas-Westwood Renewables manager Frank Wright said ‘There are all sorts of opportunities for contractors from building substations, grid connections or manufacturing plants…there is now a lot depending on the UK developing offshore wind to meet 2020 renewable targets.’
