Big 6 urge government to back gas.

FT: “The Big Six energy suppliers are pressing the government to support gas-fired power, warning that without it the UK  could face a shortfall in generating capacity.” “EnergyUK, which represents the big power companies such as Centrica, EDF Energy and RWE npower, said ministers should move faster on plans for a capacity market to encourage investment in new gas-fired power stations. / In a letter to Ed Davey, energy secretary, Angela Knight, head of EnergyUK, said a decision on a capacity mechanism was “urgently needed” to avoid further uncertainty and risk. ….About one-fifth of UK generating capacity is due to close over the next decade, much of it old coal plants that do not conform to tough EU environmental standards. Plans to replace them with new nuclear reactors and offshore wind farms have been delayed because of uncertainty over government policy and fallout from the economic crisis. / Gas plants are not being built either, largely because of the low “spark spread” – the difference between the cost of gas and the price of electricity generated from it. ….Ofgem, the electricity regulator, has warned that the “reserve margin” of spare generating capacity could get uncomfortably tight as a result, dropping from 15 per cent now to a wafer-thin 5 per cent in three years’ time. / The bill incentivises new gas plants, seen as essential back-up for intermittent wind farms, by creating a market for gas-fired power. This involves auctions for power capacity that oblige winners to deliver energy at times of peak demand. It is hoped that capacity payments will provide the kind of reliable income stream that energy companies need to make investments in new plants. / But the first capacity auction is not expected to take place before 2015 and with plants taking at least two years to build, few expect any new ones to be up and running before 2017.”