Atkins welcomes the Government’s carbon floor price announced in today’s budget - 23 March 2011

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Martin Grant, managing director of Atkins’ Energy business, today welcomed the Government’s announcement of a floor price for carbon, set at an initial £16tCO₂, as a “sensible market driven solution to progressively drive the decarbonisation of the UK’s power industry”.

Martin added: “It will, for the first time, start to impose true cost-accounting on the impact that carbon has on the environment and therefore drive innovation across the entire engineering and design sector.

“However any change to the current mechanism for supporting the low carbon energy sector needs to be approached carefully to ensure there is no reduction in investor confidence.”

The proposed carbon floor price which the Chancellor, George Osborne, said would take effect in 2013 and rise to around £30tCO₂in 2020 is a strong move though it still does not reflect fully the environmental costs associated with the use of fossil fuels.  Five years ago Atkins’ project and cost management consultancy division, Faithful+Gould, priced the financial impact of avoiding one tonne of carbon reaching the atmosphere at £200 per tonne. It is likely that cost will have risen since the calculation was done but clearly a floor price for carbon could not be set at this level as it would place UK industry at a commercial disadvantage. We also consider that rates proposed by the Chancellor today are sufficient to begin to drive change.

The transition to a low carbon energy system must be achieved sensibly so that energy costs are as transparent and as low as practicably possible, i.e. generation and distribution is as efficient as it can be. It is also vital to mitigate the risk of the ‘the lights going out’ by prudent planning, consistent political backing and strong project management. Fine tuning of the carbon floor price and other incentive mechanisms must be left to the economists but Atkins believes today’s announcement is positive.

The proportion of the tax revenue associated with the carbon floor price can be used to:

• Help fund engineering development programmes to reduce the capital and operational costs of large scale offshore wind generation.  If the planning, design, construction and operational costs of offshore windfarms can be reduced whilst confidence in the reliability of generation is increased we are likely to see investment on the scale required. 

• Fund development of affordable large-scale energy storage technology. By storing renewable energy when production potential exceeds demand we will reduce the absolute amount of CO₂emitted. Spilling renewable energy and then falling back on higher carbon generation is an undesirable feature of our current situation. One measure could be the roll-out of a home charging network for electric cars. It is estimated that a fleet of eight million electric vehicles could have a storage capacity of around 40GW.  HMG should take this into consideration when reviewing the tax incentives that may apply to purchase of new electric cars, i.e. a variation of the vehicle scrappage scheme.

• Stimulate the development of engineering skills to ensure that we’re not caught out by having insufficient resource to cope with demand. That expertise can also support UK plc by allowing British-based companies to compete for new energy development contracts around the world. We strongly believe this should be achieved primarily via the existing university network and should ensure the deepening of the UK’s technical skills base through learning and research.

• Support investment in energy efficiency and demand reduction measures in the built environment, for example low carbon retrofits; improving a building’s fabric (insulation and air tightness) and services (lighting upgrades, controls, new boilers and chillers) and data collection for benchmarking purposes.  According to the Intergovernmental Panel on Climate Change (IPCC) and Faithful+Gould’s own research these offer the highest carbon reduction returns. 

The Chancellor’s announcement today shows co-ordinated thinking by the Government and it lends support to the Department of Energy and Climate Change’s (DECC) objective to set out a long term strategy to meet climate change targets. DECC’s 2050 Pathway debate, which began this month and was supported by Atkins, is heavily reliant on the evolution of the energy generation sector and the carbon floor price set today will provide support for that ambition.

Ends

For more information: 

 
Andy Winstanley
Head of PR

+44(0)1372 752018 / +44(0)7803 259643

andy.winstanley@atkinsglobal.com

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Notes to editors:

Atkins (www.atkinsglobal.com) is the UK’s largest engineering and design consultancy and the world’s 11th largest design firm.  We have the depth and breadth of expertise to respond to the most technically challenging and time critical infrastructure projects and the urgent transition to a low-carbon economy. Whether it’s the concept for a new skyscraper, the upgrade of a rail network, the modelling of a flood defence system or the improvement of a management process, we plan, design and enable solutions.

Recent projects include:

• Major infrastructure works, such as the design and programme management of the civil works for the Dubai Metro red and green lines in the UAE;
• Critical programme management of storm protection works in the wake of Hurricane Katrina in New Orleans and Southern Louisiana, USA, providing expertise in coastal restoration, engineering, environmental and GIS support to rebuild defences and protect habitats;
• High profile transport planning and urban design – our innovative scheme to deliver a diagonal crossing at Oxford Circus in London, UK, has helped tackle the problem of pedestrian crowding;
• Key rail projects – providing architectural and engineering design services on Crossrail, Europe’s biggest civil engineering project in London, UK, and designing stations, tunnelling and track systems for Gautrain, South Africa’s first high speed line;
• Vital water and environmental projects – as part of a joint venture, Atkins is providing technical assistance to the Water Supply and Sanitation Sector Reform Programme in Nigeria, which will benefit up to three million people;
• Multidisciplinary building design – Northwood Primary School in Darlington, UK, is an exemplar project which raises standards for environmental design and community engagement.

Atkins was named among The Sunday Times 25 Best Big Companies to Work For 2011, won Consultancy of the Year in the CIBSE Low Carbon Performance Awards 2010; received the first ever certification of the Carbon Trust Standard awarded to an engineering consultancy in the construction sector; and was included in The Times Top 50 Companies Where Women Want to Work 2009 and The Times Top 100 Graduate Employers 2010. Atkins was also construction and civil engineering sector winner for the fifth consecutive year in the Target National Graduate Recruitment Awards 2010 and was awarded a RoSPA Gold Award 2010 for excellence in control of health and safety in the workplace.

Atkins is the official engineering design services provider for the London 2012 Olympic and Paralympic Games. 

News Source : Atkins welcomes the Government’s carbon floor price announced in today’s budget - 23 March 2011