§ Mr. Stephen O'BrienTo ask the Secretary of State for Trade and Industry what impact she expects the EU emissions trading scheme to have on electricity prices. [158850]
§ Mr. TimmsThe impact of the EU emissions trading scheme will depend on the price of carbon in the market and the extent to which this is passed through by generators. The Department has based its estimates on a carbon price in a range from €5–25/tonne of CO2. In the first phase of the scheme at least, from 2005 to 2007, the Department believes that the carbon price is more likely to be towards the bottom of the range. The electricity price increase corresponding to a carbon price of €5/tonne is estimated to be 3 per cent. for domestic customers and 6 per cent. for industrial customers.
The Department commissioned ILEX Consulting to undertake work on the implications of the emissions trading scheme on the power sector. Their report can be found at: www.dti.gov.uk/energy/sepn/ilex_report.pdf
1683W
§ Mr. Stephen O'BrienTo ask the Secretary of State for Trade and Industry what assessment she has made of the impact of her Department's interpretation of the EU emissions trading scheme on UK competitiveness. [158851]
§ Mr. TimmsThe Department has considered carefully the implications of the EU emissions trading scheme for UK competitiveness in decisions on the overall cap. The expected impacts on energy costs and their effects on trade and the regions and countries of the UK have been published in the following document: www.dti.gov.uk/ energy/sepn/euetsimplications.pdf
We will keep this under review as national allocation plans of other member states become clearer.