The draft Energy Bill: a five-minute summary
Today DECC has published a draft of the new Energy Bill. Here’s a five-minute summary to get you up to speed.
What’s in the Energy Bill?
Electricity Market Reform (EMR)
The way we use and generate electricity is changing. Our demand for electricity is expected to double by 2050 as we move towards electric heating and transport, but lots of old power plants are closing.
The much-discussed EMR is intended to try and attract the £110 billion investment we need to upgrade and expand our energy infrastructure for the future, meet our emissions obligations and increase the use of renewables.
The Bill includes:
- Contracts for Difference, which is hoped will provide ‘stable and predictable’ incentives for companies to invest in low-carbon generation;
- Investment Instruments – to help get investment before Contracts for Different come into force;
- Capacity Market – to help make sure we have enough electricity in the future;
- Conflicts of Interest and Contingency Arrangements
- Renewables Transitional – transition arrangements for investments under the renewables obligation scheme,
- Emissions Performance Standard – to limit emissions from new fossil fuel power stations.
A new Strategy and Policy Statement (SPS)
The SPS is intended to improve things at a regulatory level and ensure that the government and Ofgem are working to the same strategy and with the same aims. It will also lay down the roles and responsibilities of the government, Ofgem and other relevant organisations.
The creation of the Office for Nuclear Regulation (ONR)
The ONR will regulate the nuclear power industry, to regulate the safety and security of the next generation of nuclear power plants. This move signals the government’s ongoing commitment to nuclear as source of electricity in the UK.
What's not in the bill?
There are few things that you might have expected to be in the Bill that are missing. One such example is energy efficiency; there's nothing in the draft to do with cutting energy usage. There is also less of a focus on renewable energy, with gas and nuclear being the focal point of the Bill.
For more information on the Energy Bill visit our partners Busines Juice.
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