22.05.12
Draft energy bill to reassure investors
The Government’s draft energy bill is due today, designed to encourage investment in clean energy generation and reduce the UK’s reliance on gas from overseas.
The bill is expected to outline long-term contracts for nuclear and renewable energy, which should reassure companies looking to invest by guaranteeing profits. The UK needs to increase its energy capacity to compensate for a number of coal and nuclear plant closures.
The DECC has stated that £110bn investment is needed over the next decade to boost electricity generation.
Energy secretary Ed Davey acknowledged that energy bills would probably increase, but said prices would rise even more if no action was taken, due to the increasing cost of imported gas.
He told the BBC: “We need to make sure the bias towards gas is dealt with... and that low carbon sources can compete on a level playing field.
“With nuclear capacity and coal capacity coming offline, we need a market structure to keep the lights on. To get investment, we need to give investors certainty that will lower the cost of capital.”
The bill will introduce an Emissions Performance Standard, designed to prevent the construction of new coal plants unless they have carbon capture and storage technology. An independent regulator will also be created – the Office for Nuclear Regulation.
Dr Gordon Edge, director of policy at RenewableUK, said: “Investment decisions for both developers and manufacturers need to be made a long time in advance and it’s key that they get reassurance and understanding of how the market will allow generators of all sizes to produce and sell power.”
The draft energy bill will be scrutinised by Parliament before appearing as a fully-fledged bill in the autumn.
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