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DECC Publish Draft Energy Bill

23 May 2012

The Secretary of State for Energy and Climate Change yesterday (22 May) announced in a Written Ministerial Statement the publication of a draft Energy Bill

The Energy and Climate Change Select Committee have announced an enquiry to scrutinise it, and has issued a call for written evidence.

The Bill will establish a legislative framework for delivering secure, affordable and low carbon energy, which includes provisions on:

Electricity market reform (EMR)

The bill puts in place measures to attract the £110bn investment, which is needed to replace current generating capacity and upgrade the grid by 2020, and to cope with a rising demand for electricity.

This includes provisions for:　

  • contracts for difference - long-term instruments to provide stable and predictable incentives for companies to invest in low-carbon generation
  • investment instruments - long-term instruments to enable early investment in advance of the CfD regime coming into force
  • capacity market - to ensure the security of electricity supply
  • conflicts of interest and Contingency Arrangements - to ensure the institution which will deliver these schemes is fit for purpose
  • renewables transitional - transition arrangements for investments under the renewables obligation scheme
  • emissions performance standard - to limit carbon dioxide emissions from new fossil fuel power stations.

Further information can be found on the EMR Webpage.
　

Strategy and policy payment

In addition to EMR, the Energy Bill will also improve regulatory certainty by ensuring that Government and Ofgem are aligned at a strategic level through a Strategy and Policy Statement (SPS), as recommended in the Ofgem Review of July 2011.　

Nuclear regulation

The Bill places the interim Office for Nuclear Regulation (ONR) on a statutory footing as the body to regulate the safety and security of the next generation of nuclear power plants. This includes setting out the ONR's purposes, regulations and functions.

Government pipe-line and storage system

The Bill includes provisions to enable the sale of the Government Pipe-line and Storage System (GPSS). This includes providing for the rights of the Secretary of State in relation to the GPSS, registration of those rights, compensation in respect of the creation of new rights or their exercise, and for transferral of ownership, as well as powers to dissolve the Oil and Pipelines Agency by order.

Copies of the Energy Bill and the associated explanatory notes can be found HERE

Darrel Moore