Contribution to Belgian National Debate on Carbon Pricing, Brussels, 25th Jan 2017 Michael Grubb

Brussels, 25th Jan 2017
Michael Grubb
Prof. International Energy and Climate Change Policy, UCL
Chair, UK government Panel of Technical Experts on Energy Market Reform

• The “classical” reasoning and its paradox
• The wider reality
• The energy efficiency gap
• The infrastructure challenge
• Carbon pricing – integrating ‘old’ and ‘new’

2012
2013
2015
2016
2014
C-Price support doubled to £18/kWh
UK - Carbon floor price impacts coal
Dramatic (80%) fall since 2012: first hours without coal power for over a Century
Driven as declining gas price meets rising carbon price, and renewables
Falls 2012-15 offset by rising renewables; increased gas in 2016

.. And once coal out of the power system, a carbon price has much lower impact on electricity price, facilitating growth to levels that could have more direct impacts across other sectors

• Scenarios include measures available at lower cost than Government carbon values
• And reflect need to ensure that measures required to meet 2050 target are available to be deployed when needed

Standards & Engagement
Markets & Prices
Strategic Investment

POLICY PILLARS
Technology options & competitiveness
Need to integrate across all three pillars of policy:

• Efficiency policies, particularly for poorer households & deeper retrofits
• Carbon price
• Innovation and infrastructure

Manage bills, increase responsiveness
Revenues, revealed costs, strategic value