http://www.energyefficiencynews.com/i/5116/

 

The UK government's climate change policies could reduce the negative impact of prices spikes in oil, gas and coal by over 50% by 2050, says Energy Secretary Ed Davey.

 

Unveiling an analysis by Oxford Economics for the government, Davey said the use of low-carbon energy sources like renewables and nuclear and increased energy efficiency could reduce the UK's sensitivity to price shocks.

"Every step the UK takes towards building a low-carbon economy reduces our dependency on fossil fuels, and on volatile global energy prices," he said.

Davey cited the example of the Arab Spring, which pushed up wholesale gas prices last year, leading to a 20% hike in UK household bills.

"The more we can shift to alternative fuels, and use energy efficiently, the more we can ensure that our economy does not become hostage to far-flung events and to the volatility of market forces," he added.

Shifting to a low-carbon economy, would halve the impact of energy price volatility on household income, business investment, inflation and levels of unemployment.

Tomorrow the government will publish its draft Energy Bill, which will set out in detail the plans for reforming the country's electricity market to keep the lights on and bills down.

The plans will also set out how the UK can attract some £110 billion of investment to build new low-carbon generating plants and meet its climate change targets of an 80% reduction in greenhouse gas emissions by 2050.