GWPF
"The UK’s carbon price ‘top up’ will encourage utilities to raise electricity prices, increasing their profits by £7 billion ($11 billion), according to a report by investment bank Credit Suisse.
From April 2013, electricity generators will have to pay a top-up carbon tax on fossil fuels – initially set at £4.94 a tonne. It has been introduced by the UK government in case the EU carbon price does not increase enough to make the case for investing in lower carbon generation, such as renewables. Higher prices will bring in an extra £24 billion in revenue between 2013 and 2020, the report concludes, but only about £17 billion will end up in the public purse.
“Whilst the EU ETS [Emissions Trading System] is successfully delivering emissions reductions across the UK and Europe, so far the carbon price has not been sufficient to incentivise the required levels of new low-carbon investment,” the Department of Energy and Climate Change said last week in its latest energy policy proposal.
Credit Suisse calculates that all UK utilities stand to benefit from the measure, except for Drax Group, which operates one large coal-fired power plant.
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