Institution responds to Government's energy and infrastructure statement

The Institution's Dr Tim Fox says raft of announcements on energy infrastructure initiatives will go someway towards creating investor confidence - but insists the Government needs to do more to meet future energy needs.

Dr Tim Fox, Head of Energy and Environment at the Institution of Mechanical Engineers, said in response to Danny Alexander's statement on infrastructure spending:

“Today’s raft of announcements on energy infrastructure initiatives including nuclear, renewables and shale gas are long overdue and will go someway towards creating investor confidence.

“Danny Alexander revealed a potential “multi-billion pound guarantee” for a new nuclear power reactor at Hinkley Point, which is a welcome initiative and something the Institution called for in our Nuclear New Build report over three years ago.

“Setting a strike price in the contract for nuclear power is however a critical step yet to be taken if we are to meet this country’s future low-carbon power needs. While we welcome today’s announcement of proposed strike prices for renewable energy sources – which will be put out for consultation - it is worrying that no strike price has yet been set for nuclear.

“The UK public is increasingly concerned about the country’s future energy security. An Institution poll last month found that 64% of people are concerned about possible blackouts, and that 93% are worried about higher electricity and gas bills. Today's announcements from Ofgem that spare power capacity could fall to as little as 2% by 2015-16, creating a greater chance of blackouts, underlines this concern and the need to get on with energy infrastructure development without further delay.

“The news from the British Geological Survey that the UK has much larger shale gas resources than previously estimated reiterates the need to begin exploration. Without a significant programme of exploratory drilling it is not possible to have an accurate discussion on the potential of this energy source and the contribution it might make to the UK energy mix.

“For a range of reasons, including geology and public acceptance, UK shale gas is unlikely to meet a significant part of our future energy demand and Government should instead focus strongly on stimulating delivery of the energy infrastructure we need to meet the demands of this decade."