Tories promise gas and electricity supply guarantees
The Conservatives’ scheme is aimed at incentivizing power firms to build added capacity and intervene over supply contracts and storage facilities to protect gas supplies in the winter.
Tory leader David Cameron said energy policy was “out of date” and Labour had failed to modernise key infrastructure.
Labour said the policy approach was “simplistic and ill-thought through”.
Publishing a consultation paper on energy security, the Tories said they supported government plans to build a new generation of nuclear power stations to replace the majority of existing plants which are due to cease operating by the middle of the next decade.
However, the Tories said Labour had “consistently ducked” the challenge of reforming power infrastructure and diversifying energy sources to offset the fall in North Sea oil and gas production.
The party has warned that the “lights could go off” at some point over the next 15 years if existing capacity is not replaced and says its priority is to deliver secure, sustainable and affordable supplies of energy.
Under a new electricity capacity guarantee, regulators would be able to issue long-term supply contracts to generators to stimulate investment while gas suppliers could be required to build extra storage facilities to prevent strains on the network at times of peak consumption.
The Tories are also recommending a overhaul of the climate change levy, to charge firms on the basis of their emissions and to provide a “floor” price for carbon to encourage emissions trading.
Ministers will be required to deliver an annual energy policy statement to Parliament while energy regulator Ofgem will lose its competition and consumer protection powers – to be handed to the Office of Fair Trading – and focus solely on executing policy.
“British energy policy is out of date,” Cameron said.