Prime Minister Gordon Brown is to invite the oil-rich nations of Opec to invest in a £100 billion drive for renewable energy in the UK over the next 12 years.
Speaking to a conference of major oil-producing and consuming countries called by Saudi King Abdullah in Jeddah, Mr Brown will reveal that talks have already begun with Abu Dhabi, Qatar and the United Arab Emirates about investment opportunities in UK energy, including a new generation of nuclear power plants.
And he will reveal that Government plans to be published next week will put a price tag of £100 billion for the UK to meet EU targets to generate 20% of energy from renewables by 2020, much of which could come from the sovereign wealth funds of oil-rich Gulf states.
In a clear plea to avoid the 1970s-style use of oil prices as an economic weapon, Mr Brown will call for a “new deal” for global energy, building “a greater commonality of interest between producers and consumers”.
He will offer to open British energy markets to investment from oil-producing countries, either directly or through the sovereign wealth funds swollen by the billions of dollars of additional revenues from the current price spike.
And he will call for more investment in production and refining capacity to increase the supply of oil in the short term, in the hope of bringing prices down from their current peak of almost 140 US dollars a barrel and easing the burden on motorists paying around £1.20 a litre for unleaded petrol at UK pumps.
A text of Mr Brown’s speech circulated as he arrived in Jeddah indicated that he will say the world is going through “the third great oil shock in as many decades” which is having a “severe impact” on standards of living around the globe.
He will call for greater transparency in the markets and greater co-operation between consumers and producers to end the “uncertainty and volatility” which have seen prices more than double over the past year.
This will mean oil-producing states being ready to use the technical expertise of high energy-use countries like Britain to increase supply, remove bottlenecks from the system and develop environment-friendly carbon capture and storage technology.
And it will mean Western nations being open to investment from Opec states in the new “green” energy plants they will need to meet targets to reduce emissions of greenhouse gases such as CO2. By 2050, the world is expected to need 1,000 new nuclear power stations, 700,000 new large wind turbines and a 600% increase in energy from solar, biomass and hydro-power sources, he will say.
The Press Association
22 June 2008
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