Page last updated at 10:26 GMT, Thursday, 16 December 2010

Huhne unveils 'seismic shift' in energy policy

The government has unveiled a "seismic shift" in energy policy, including a move to guarantee prices for electricity to persuade the private sector to invest in new low-carbon forms of generation.

In a Commons statement on 16 December 2010, Energy Secretary Chris Huhne dismissed reports that consumers' electricity bills could rise by £500 a year as a result of the measures as "absolutely bonkers".

He told MPs: "While prices rise in the medium term, the additional impact of the reform packages will be small, but by 2030, consumer bills will be lower than if we did not reform the market."

Mr Huhne said the government would aim to encourage new entrants into the energy market, make clean energy more attractive to investors, develop reserve plants to ensure "the lights stay on" during periods of high demand, and limit the amount of carbon emissions from "dirty" power stations.

"We have a once-in-a-generation chance to rebuild our electricity market, rebuild investor confidence, and rebuild our power stations," Mr Huhne said.

"Like privatisation before it, this will be a seismic shift; securing investment in cleaner, greener power - and delivering secure, affordable and low-carbon energy for decades to come."

Shadow energy secretary Meg Hillier welcomed the plans but warned they must provide "fairness and affordability for consumers".

She said: "We face this very big challenge together but we must not allow the consumer to bear the whole burden."

Ms Hillier said ministers had "dangled cheaper prices from 2030 in front of us" but they should ensure "energy prices today are being tackled as well".

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