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The UK will face “blackouts” without building new gas power stations, ministers have claimed.

The government has said that while it will continue to move forward with its net zero targets and a focus on renewables, gas was needed as a “back-up” – with Prime Minister Rishi Sunak saying climate goals must be reached “in a sustainable way that doesn’t leave people without energy on a cloudy, windless day”.

Energy Secretary Claire Coutinho will outline the plans for new stations in a speech later today, which include a full review of the electricity market and changes to the law to make the plants ready convert to low-carbon alternatives.

But Greenpeace said the plan would make the country “more dependent on the very fossil fuel that sent our bills rocketing and the planet’s temperature soaring”.

Politics live: UK risks blackouts without new gas stations, minister will warn

Electricity demand is increasing as the UK electrifies things like heating and cars, and the population grows.

Officials have been reviewing how to make sure supply keeps up with demand, is reliable, and reaches the right areas of the country.

Today the Department for Energy Security and Net Zero said it was clear the UK would need new backup gas capacity to provide power that can be fired up on demand, on days when it isn’t windy or sunny enough to get electricity from renewables.

That’s also because some gas plants are due to retire in the coming years.

The commitment to renewed unabated gas was long expected, and the energy industry welcomed the reassurance on how to direct its investment.

But some analysts warned extra gas is the wrong solution to the question of how to meet increasing demand and provide flexibility, and said it was a reflection of failure in other areas of energy security policy.

‘We must be realistic’

In a speech today at Chatham House, Ms Coutinho is expected to say: “There are no easy solutions in energy, only trade-offs.

“And so, as we continue to move towards clean energy, we must be realistic.”

In a statement overnight, Mr Sunak said: “I will not gamble with our energy security. I will make the tough decisions so that no matter what scenario we face, we can always power Britain from Britain.”

Labour’s shadow energy secretary, Ed Miliband, said the plans were only necessary because of “fourteen years of failed Conservative energy policy”, including an effective ban on onshore wind, slow progress on energy efficiency and last year’s failed offshore wind auction.

However, he added that if old capacity needs replacing, Labour would be open to some new gas power generation, too.

Mr Miliband said: “Of course we need to replace retiring gas-fired stations as part of a decarbonised power system, which will include carbon capture and hydrogen playing a limited backup role in the system.”

The government argues the move is in line with its climate commitments to cut emissions from fossil fuels because although gas capacity will increase, overall running hours will reduce, as the gas power would not be not firing all the time, but could be scaled up and down as a backup.

‘The government has missed opportunities’

Juliet Phillips, UK energy programme lead at thinktank E3G, said the UK has been a “clean power leader”, given its “continued exponential growth in renewables”.

But the government’s “policy failures” and “missed opportunities” in offshore wind and grid connections left it having to announce new gas power today.

New gas capacity “must come with strict conditions that new plants can be retrofitted with green hydrogen or carbon capture and storage in the future,” she said.

The government wants to boost gas capacity by tweaking capacity market rules, with the costs being covered by billpayers – who would foot the bill for any backup capacity.

It is also considering broadening existing rules for new plants to be able to convert to lower-carbon alternatives, such as by adding carbon capture technology to catch and store emissions.

However, it did not confirm how much new gas capacity was needed.

Kisha Couchman, deputy director at Energy UK, said the power system is undergoing “significant change” as the sources diversify and flexibility becomes more important.

She added: “The challenge is to bring forward changes to support this aim while also providing the certainty essential to bring forward long-term investment – so it’s also right to look at the role that existing mechanisms can play.”

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Need for ‘no regrets’ options

Climate and energy thinktank ECIU said there are cheaper, more climate-friendly forms of backup power that could be used instead, such as using EVs to give power back to the grid and battery storage.

The announcement comes as the government gives an update on its consultation for the Review of Electricity Market Arrangements (REMA).

It has ditched a previous proposal to stop linking electricity prices with gas prices.

It is finessing one proposal to bring in regional pricing of wholesale electricity, which could incentivise industry to build in areas where electricity is cheaper, and attract new power projects where demand is greatest.

However, critics have raised concerns over the fairness of the proposal, and ministers have not yet decided if households would be subject to a “postcode lottery” of different costs in different areas.

Another option for continued regional pricing remains on the table.

Guy Newey, CEO at Energy Systems Catapult, said the only way to green the electricity system “in time and without pushing up bills is to move to a market that reflects local supply and demand”.

“It is an essential step forward to see government proposing stronger locational signals in the wholesale market,” he said.

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Millionaire former Tory donor defects to Reform

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Millionaire former Tory donor defects to Reform

Millionaire Tory donor Malcolm Offord has defected to Reform UK, saying he would be campaigning “tirelessly” to “remove this rotten SNP government”.

Nigel Farage announced the former Conservative life peer’s defection during a rally in the Scottish town of Falkirk, where regular anti-immigration protests have taken place outside the Cladhan Hotel – which is being used to house asylum seekers.

Mr Farage, Reform UK’s leader, said he was “delighted” to welcome Greenock-born Lord Offord to Reform, describing his defection as “a brave and historic act”.

He added: “He will take Reform UK Scotland to a new level.”

During a speech, Lord Offord, who previously donated nearly £150,000 to the Tories, said he would be quitting the Conservative Party and giving up his place in the House of Lords as he prepares to campaign for a seat in Holyrood in May.

The 61-year-old said he wanted to restore Scotland to a “prosperous, happy, healthy country”.

“Scotland needs Reform and Reform is coming to Scotland,” he told the rally.

Read more:
Nigel Farage dismisses school racism claims as ‘banter in a playground’
Farage allegations are deeply shocking – but will they deter voters?

“Today I can announce that I am resigning from the Conservative Party. Today I am joining Reform UK and today I announce my intention to stand for Reform in the Holyrood election in May next year.

“And that means that from today, for the next five months, day and night, I shall be campaigning with all of you tirelessly for two objectives.

“The first objective is to remove this rotten SNP government after 18 years, and the second is to present a positive vision for Scotland inside the UK, to restore Scotland to being a prosperous, proud, healthy and happy country.”

The latest defection comes as Mr Farage finds himself at the centre of allegations of racism dating back to his time in school.

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Claims made against Nigel Farage

Sky News reported on Saturday that a former schoolfriend of Mr Farage claimed he sang antisemitic songs to Jewish schoolmates – and had a “big issue with anyone called Patel”.

Jean-Pierre Lihou, 61, was initially friends with the Reform UK leader when he arrived at Dulwich College in the 1970s, at the time when Mr Farage is accused of saying antisemitic and other racist remarks by more than a dozen pupils.

Mr Farage has said he “never directly racially abused anybody” at Dulwich and said there is a “strong political element” to the allegations coming out 49 years later.

Reform’s deputy leader Richard Tice has called the ex-classmates “liars”.

A Reform UK spokesman accused Sky News of “scraping the barrel” and being “desperate to stop us winning the next election”.

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‘European SEC’ proposal sparks licensing concerns, institutional ambitions

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‘European SEC’ proposal sparks licensing concerns, institutional ambitions

The European Commission’s proposal to expand the powers of the European Securities and Markets Authority (ESMA) is raising concerns about the centralization of the bloc’s licensing regime, despite signaling deeper institutional ambitions for its capital markets structure.

On Thursday, the Commission published a package proposing to “direct supervisory competences” for key pieces of market infrastructure, including crypto-asset service providers (CASPs), trading venues and central counterparties to ESMA, Cointelegraph reported.

Concerningly, the ESMA’s jurisdiction would extend to both the supervision and licensing of all European crypto and financial technology (fintech) firms, potentially leading to slower licensing regimes and hindering startup development, according to Faustine Fleuret, head of public affairs at decentralized lending protocol Morpho.

“I am even more concerned that the proposal makes ESMA responsible for both the authorisation and the supervision of CASPs, not only the supervision,” she told Cointelegraph.

The proposal still requires approval from the European Parliament and the Council, which are currently under negotiation. 

If adopted, ESMA’s role in overseeing EU capital markets would more closely resemble the centralized framework of the US Securities and Exchange Commission, a concept first proposed by European Central Bank (ECB) President Christine Lagarde in 2023.

Related: Bank of America backs 1%–4% crypto allocation, opens door to Bitcoin ETFs

EU plan to centralize licensing under ESMA creates crypto and fintech slowdown concerns

The proposal to “centralize” this oversight under a single regulatory body seeks to address the differences in national supervisory practices and uneven licensing regimes, but risks slowing down overall crypto industry development, Elisenda Fabrega, general counsel at Brickken asset tokenization platform, told Cointelegraph.

“Without adequate resources, this mandate may become unmanageable, leading to delays or overly cautious assessments that could disproportionately affect smaller or innovative firms.”

“Ultimately, the effectiveness of this reform will depend less on its legal form and more on its institutional execution,” including ESMA’s operational capacity, independence and cooperation “channels” with member states, she said.

Related: Grayscale Chainlink ETF draws $41M on debut, but not ‘blockbuster’

Global stock market value by country. Source: Visual Capitalist

The broader package aims to boost wealth creation for EU citizens by making the bloc’s capital markets more competitive with those of the US.

The US stock market is worth approximately $62 trillion, or 48% of the global equity market, while the EU stock market’s cumulative value sits around $11 trillion, representing 9% of the global share, according to data from Visual Capitalist.

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