Energy Bill becomes law

19th December 2013


Related Topics

Related tags

  • Energy ,
  • Procurement ,
  • Renewable ,
  • Conventional ,
  • Generation

Author

Charlotte Buffoni

The government's plans to reform the electricity market introducing a capacity market and contracts for difference to support renewables have been given royal assent

The Energy Act 2013 received royal assent yesterday (18 December 2013), paving the way for the creation of an electricity capacity market, including payments for demand reduction, and long-term contracts for difference (CfDs), which will guarantee a certain level of payment for electricity generated from low-carbon sources.

It also sets a cap on the amount of emissions that can be generated from new fossil-fueled power stations, and outlines regulation for nuclear power. In addition, the Act confirms the closure of the Renewables Obligation to new entrants from April 2017, replaced by feed-in tariffs with CfDs to support for large-scale low-carbon generation.

The Act also includes provision for the energy secretary to set a 2030 decarbonisation target for the electricity sector, however, the earliest this can be set is 2016.

The government has hailed the Act as key to enabling the £110 billion of investment needed by 2020 to decarbonise the UK’s electricity sector and ensure long-term energy security.

“We have driven the Energy Bill through parliament on time to send out a clear signal to investors and industry,” commented energy secretary, Ed Davey. “We have delivered the certainty they need and confirmed Britain’s position as one of the most attractive countries in the world to invest in energy generation.

“We are now able to build on the measures already in place to deliver cleaner energy, affordable bills, energy security and the creation of thousands of skilled green jobs across the UK.”

Following the Act’s assent, Decc also published its EMR delivery plan setting out the strike prices for renewable technologies up to 2018/19 and the “reliability standard” that will be used in the electricity capacity market.

Representatives from the UK’s renewable sector welcomed the Act and the publication by the energy department of the EMR delivery plan.

“The government, and especially Decc, is to be congratulated on succeeding in bringing the Energy Act in on time,” said Nina Skorupska, chief executive of the Renewable Energy Association. “This is a major step forward.

“Clarity on the terms of the CfDs is very helpful for project developers and investors. It is encouraging to see many of the pieces falling into place.”

However, Maria McCaffery, chief executive of RenewableUK, warned: “There are issues still to be resolved through secondary legislation and in the face of very challenging strike prices there is much work to be done between government and industry to ensure that obstacles are removed and much-needed clean and domestic sources of energy can come forward over the next decade.”

Regulations setting out the details of CfDs are expected to come into force in July 2014, with the government deciding on whether to introduce competition for more established low-carbon technologies in early 2014.

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

IEMA reviews political party manifestos

Ahead of the UK general election next month, IEMA has analysed the Labour, Conservative, Liberal Democrat, and Green Party manifestos in relation to the sustainability agenda.

19th June 2024

Read more

Sarah Spencer on the clear case for stronger partnerships between farmers and renewable energy developers

6th June 2024

Read more

A system-level review is needed to deliver a large-scale programme of retrofit for existing buildings. Failure to do so will risk missing net-zero targets, argues Amanda Williams

31st May 2024

Read more

Chris Seekings reports from a webinar helping sustainability professionals to use standards effectively

31st May 2024

Read more

Although many organisations focus on scope 1 and 2 emissions, it is vital to factor in scope 3 emissions and use their footprint to drive business change

31st May 2024

Read more

Joe Nisbet explores the challenges and opportunities of delivering marine net gain through offshore renewables

31st May 2024

Read more

IEMA submits response to the Future Homes Standard consultation

31st May 2024

Read more

Hello and welcome to the June/July of Transform.

31st May 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close