Written question asked by Stephen O'Brien (Conservative) on Monday, 1 March 2004, in the House of Commons. It was due for an answer on Thursday, 11 March 2004. It was answered by Stephen Timms (Labour) on Thursday, 11 March 2004 on behalf of the Department of Trade and Industry.

Dept of Trade and Industry

Question: To ask the Secretary of State for Trade and Industry, what impact she expects the EU emissions trading scheme to have on electricity prices. - Including figures.

Answer: Mr. Stephen O'Brien: To ask the Secretary of State for Trade and Industry what impact she expects the EU emissions trading scheme to have on electricity prices. [158850] Mr. Timms: The impact of the EU emissions trading scheme will depend on the price of carbon in the market and the extent to which this is passed through by generators. The Department has based its estimates on a carbon price in a range from è5-25/tonne of CO2. In the first phase of the scheme at least, from 2005 to 2007, the Department believes that the carbon price, is more likely to be towards the bottom of the range. The electricity price increase corresponding to a carbon price of è5/tonne is estimated to be 3 per cent. for domestic customers and 6 per cent. for industrial customers. The Department commissioned ILEX Consulting to undertake work on the implications of the emissions trading scheme on the power sector. Their report can be found at: www.dti.gov.uk/energy/sepn/ilex report.pdf

Secondary information