Wednesday 22 July 1998

UKOOA Response to Government Consultation on Energy Sources

Government interventionist policy will undermine energy competition

In response to the DTIs Review of Energy Sources for Power Generation UKOOA has expressed its concern that the Government intends to take a more interventionist stance on energy policy. The UKOOA response highlights:

* Concern that the interim consents policy will create investment uncertainty in the energy market and reduce competition.

 

* The proposals will impact on gas exploration and development of new offshore fields - accelerating the need to import gas. This will also effect the UKs balance of payments.

 

* Jobs will be at risk, both in terms of direct offshore operational employment and gas-related jobs in the contractor and supply sector.

 

* Tighter emission levels will be more difficult to achieve, resulting in a possible shift of greater environmental responsibility on to other industries.

James May, UKOOAs Director-General said: The industry supports reform of the electricity market - but implementation of such reform should not prevent gas-fired power plant development and the consequent reduction in investment confidence in new offshore gas developments. If the Government wants to ensure that the UK has a competitive energy policy it is vital that market forces are allowed to determine the way forward. This will stimulate competition and secure lower prices for the consumer.

UKOOAs response concluded that if the Government moved to a command and control policy this would signal a major policy change which might have wider implications for UK business.

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