Greenlight for EMR, GIB and Water Bill

10th May 2012


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The government will introduce legislation to meet its pledges to decarbonise electricity generation, protect water supplies and encourage investment in green technologies, the Queen's speech has confirmed

In opening the coalition’s second session of parliament, the Queen announced that the government will soon publish the long-awaited Energy Bill, reforming the UK’s electricity market (EMR), as well as a Water Bill transforming the water sector in England and Wales, and regulations enabling the creation of the green investment bank (GIB).

The draft Energy Bill, which will include plans for “contracts for difference” for renewable energy suppliers and a cap on the amount of carbon emitted by new coal plants, will be published “shortly” a DECC spokesperson confirmed after the Queen’s address, to enable the final bill to be passed into law by January 2013.

“This is crucial legislation. The Energy Bill would reform the electricity market to keep the lights on and emissions down in a more cost-effective way, while reaping the economic benefits,” the spokesperson said. “It is designed to provide investors with long-term certainty and incentives to invest in low-carbon.”

Meanwhile, Defra revealed that the draft Water Bill is to be published before the government’s summer recess and will contain proposals following last year’s Water white paper allowing businesses in England and Wales to choose their own water supplier and extending environmental permitting regulations to include water abstraction. According to the environment department, the government hopes to have the Bill passed into law in late spring 2013.

The Queen’s speech also confirmed that provisions detailing how the GIB will be funded and ensuring its independence from government will be outlined in the forthcoming Enterprise and Regulatory Reform Bill, which will also enshrine in law the bank’s purpose of encouraging investment in green businesses and projects.

Environment and business groups broadly welcomed the government’s plans.

Mark Kenber, CEO of think tank The Climate Group said: “This is a positive step after two years of lack of direction on the environment and the low carbon economy – but we need more details on the government’s funding commitments.

“The success of these measures will be dictated by the degree to which the government is prepared to invest in them.”

CBI director, John Cridland, hailed the announcement on EMR as an important stepping-stone, but warned: “Business investment in low-carbon will only happen when the detailed market framework is in place.”

He also argued that the jury was out on whether the Bill introducing the GIB would actually support business growth.

Meanwhile, James Cooper, head of government affairs at the Woodland Trust, argued that the GIB’s remit to should also include providing finance for projects aimed at enhancing the quality of the UK’s natural environment.

"Forests, trees and woods provide a wealth of economic benefits and ecosystems services to people thereby reducing energy costs, the impacts of flooding, and the severity of drought on crops,” he said.

Cooper welcomed the proposed Water Bill, but said it must also include protection for the natural environment.

However, the Green Party’s Caroline Lucas MP strongly criticised the government for not introducing any new measures to tackle climate change.

“Listening to the Queen’s speech today, you’d be forgiven for assuming that the climate crisis has simply gone away,” she said. “In the face of mounting scientific concern about the urgency of the threat we face from climate change, the deafening silence from this government is unforgiveable.”

She also described the government’s proposals for EMR as deeply flawed. “Without radical amendment, [it] risks locking us into a high carbon, high cost, and gas dependent future,” she warned.

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