UK business wants carbon price, government action

LONDON, Mar 16 (Reuters) Leading British businessmen called on the government to create the conditions for a viable long-term carbon market if the investmnent needed for vital low emission power plants was to start flowing.

The calls came with the government half way through a six-month review of the country's energy needs in the face of international commitments to cut carbon dioxide emissions and the forced closure of ageing coal and nuclear power plants.

''We need carbon prices that make investment in low carbon technologies attractive,'' Paul Golby, chief executive of E.ON formerly Powergen, told the Energy Challenge seminar.

He said up to 50 billion pounds (.29 billion) would be needed over the next 20 years to replace the ageing power plants, but noted that virtually no investment was taking place because of uncertainty over future government policies.

With Britain already set to be importing 80 percent of its gas needs within 15 years from having been a major net exporter for years, the government had to decide if it wanted to be so exposed to the vagaries of geopolitics for its energy supplies.

''If we want to avoid becoming so dependent on gas we must develop other fuels. For that we need a credible long-term carbon price,'' Golby said.

''We need to look at all the available technologies to bring this forward,'' he added. ''If we get this wrong in the next decade, our grandchildren will be picking up the tab.'' His call was echoed by Peter Mason, chief executive of energy company AMEC, who said the country needed to build up to 30 new major power stations by 2020 to plug the energy gap.

''We really do need to start planning now,'' he told the meeting.

SERIOUS BATTLES Mason noted a yawning gulf between reality on the ground and the words of the 2003 energy white paper that advocated more renewable energy like wind, waves and biomas.

He said his company was a big player in the wind energy construction market but had found that in virtually every case it had faced coordinated opposition and serious battles over gaining planning permission.

''We want to see more determination from the government in making things happen,'' he said, also noting the planning battles that had always dogged the nuclear power industry and probably would again if the energy review opted for nuclear new build.

Energy Minister Malcolm Wicks rejected speculation that the energy review outcome was a foregone conclusion to back nuclear and deplored the fact that some people were painting it as a straight forward choice between renewables and nuclear power.

But he noted that the recent spike in imported gas prices had focused attention in the growing reliance on foreign suppliers of energy sources.

''Worries about gas supplies are indicative of a longer-term question,'' he said.

''This is not only about science and technology but also about hearts and minds. We have to find better ways to bring the individual into the debate,'' he added extolling the virtues of carbon capture and storage and microgeneration.

REUTERS SK RAI0455