Energy and Utilities

Legislation

The Energy Act 2010

The Act has three principal objectives:

1. The introduction of a framework for a financial incentive to support commercial-scale demonstration of carbon capture and storage (CCS) and funding for the fitting of additional CCS capacity to those projects at a later stage
2. The introduction of schemes for the reduction of fuel poverty (which will introduce mandated social price support)
3. The strengthening of the powers of Government and the regulator to ensure that the energy markets are working fairly for consumers and delivering secure and sustainable energy supplies.

The Act includes provisions on:

• A new Carbon Capture and Storage (CCS) Incentive to support the construction of four commercial-scale CCS demonstration projects in the UK and the retrofit of additional CCS capacity to these projects should it be required at a future point. CCS is a mitigation technology essential in tackling global climate change, and ensuring a secure energy supply.
• Requiring the Government to prepare regular reports on the progress that has been made on the decarbonisation of electricity generation in Britain and the development and use of CCS.
• Tackling fuel poverty by lowering the energy bills of more of the most vulnerable consumers and giving greater guidance on the types of households eligible for support. These measures will be funded by requiring energy companies to make available at least £300 million per annum by 2013-14 on social support.
• Allowing the Government to set the period within which energy companies must inform customers of changes to their gas and electricity tariffs.
• Enabling the Secretary of State to address certain types of cross-subsidies between gas and electricity supply businesses should they impact unfairly on consumers.

 

The Energy Bill
The Energy Bill will introduce a “green deal” charging system in order to promote energy efficiency measures in the home.

Provisions will be made for the promotion- by energy companies- of reductions in carbon emissions within the household and fair competition in the energy market. Security of energy supplies will be increased and the issue of decommissioning nuclear sites will be addressed.

In order for this to work successfully, incentives will be offered to suppliers and households to reduce their carbon footprint and save energy.

The Energy Bill 2010/2011

Update: March 15, 2011
The Energy Bill was introduced into the House of Commons with its First Reading. The Second Reading is expected to be held after the Easter recess. During the various stages a number of points were raised and the Minister gave a number of reassurances to address these.