The UK government has said it is not expecting a “massive” disruption in its expansion plans after Brexit, as the UK’s largest energy company announced plans to double its capacity by 2040.
The Government said the announcement was a “positive step” in the UK energy future after the Government announced plans for a “huge” expansion of gas and coal-fired power stations by 2042.
But the company, Devon Energy, said its plans would be delayed until 2040 and said it was still reviewing the details.
“We are in the process of updating our plans for the next decade and this will be a positive step for the UK in terms of our long-term investment strategy,” Devon’s Chief Executive, Paul Smith, said in a statement.
The UK’s economy grew by 2.2 per cent in the second quarter, well above the 3.1 per cent predicted by the Office for Budget Responsibility, according to a preliminary estimate by economists at the University of Oxford.
But it is expected to slow to a growth of just 0.4 per cent over the next 12 months.
The company said it would invest £50 billion in new plants and invest in more coal and gas-fired plants to reach peak electricity demand by 2035.
“This will allow us to deliver the highest possible electricity prices in 2035, which is consistent with the UK Government’s ambition to provide the cheapest electricity in the world,” Mr Smith said.
“In particular, we are targeting to have the most cost-effective, most cost effective gas- and coal plants in the region.”
The UK is a key market for our electricity, but as this announcement shows, we must not leave the UK to our own devices.
“The Government also announced plans last month for the expansion of the UK National Grid, which it said would provide power for nearly half of the country’s electricity needs by 2026.
The National Grid is owned by the Department for Energy and Climate Change, and was previously funded by a £5.5 billion EU-funded grant.
The move comes as the country prepares to leave the European Union.
The government is currently negotiating the UK exit from the bloc, with the Government having been accused of “sowing the seeds of chaos” by its EU partners.
Last week, the Government said it wanted to take over the management of the power market by 2025.
In an interview with the Financial Times, the Chief Executive of Devon Energy Philip McAlpine said he was confident that his company would be able to deliver on its ambitious expansion plans.”
I’m not worried about the prospect of an enormous, massive disruption, and I’m quite sure that the Government will be pleased with our decision to take this step,” Mr McAlpin said.
The news comes just days after the government said it expected to increase the countrys electricity demand to the highest level in 25 years by 2038.
The Department for Business, Energy and Industrial Strategy said it had invested £1.4 billion to support the construction of new plants in Devon, and to extend its current gas-to-power plant at Clapham.
It said it planned to spend £2.5bn on “significant” renewable energy investment by 2028.