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Dept of Trade and Industry

Answer

Norman Baker: To ask the Secretary of State for Trade and Industry what assessment she has made of the potential effects of electricity power generators buying and selling (a) gas and (b) other fuels on future markets on the emissions trading scheme. [202081] Mr. Mike O'Brien: We expect the EU Emissions Trading Schemes (ETS) to encourage generators to switch from using high carbon fuels (e.g. coal or oil) to lower or zero carbon fuels (e.g. gas or hydro). Such switching will have an effect on forward markets for the different fuels. The extent of this switching will be determined by the price of carbon, as well as the relative fuel prices and other costs associated with power generation from different types of plant. The price of carbon will be determined across the whole of the EU. The differences in behaviour of individual UK market participants are expected to have only a minimal impact on the price of carbon. The potential effect of differing assumptions about the ETS on the generation fuel mix was assessed in the study (Implications of the EU ETS for the Power Sector--Annex C), for DTI, by ILEX in September 2003: http://www.dti.gov.uk/energy/sepn/ euets.shtml

Secondary information

Type

Written question

Reference

202081; 428 c591W

Session

2004-05

Subjects

Carbon Electricity generation Electricity Fuels EU emissions trading scheme Natural gas Markets Power stations Generators

Link

View this Written question on www.publications.parliament.uk