Government announces biggest energy reforms in 20 years

Government announces biggest energy reforms in 20 years

22 May 2012 Guardian

The draft energy bill plans major changes to the market, causing concern that consumers' bills could rise and renewable energy is being neglected. 

The biggest reforms to the UK energy sector in two decades were set out on Tuesday, prompting warnings from consumer groups and green campaigners that they would raise bills and penalise renewable energy while boosting nuclear power.

The sweeping reforms, detailed in the draft energy bill, grant the government powers to intervene in the market on a scale not seen since the industry was privatised.

Under the changes, low-carbon generators including nuclear companies will receive a fixed price for their energy that should be higher than they can sell it for on the open market, and ministers will create a "capacity market" to ensure a reliable supply of power and prevent blackouts.

There will be a minimum price for carbon dioxide emissions, and an emissions performance standard that will in effect stop any coal-fired power stations being built without technology to capture carbon.

The reforms will mean major changes to the way the market is regulated, and the way utilities and their smaller rivals operate.

Ed Davey, the secretary of state for energy and climate change, said the reforms would help to bring forward the estimated £110bn in private-sector investment that will be needed for new low-carbon energy capacity, and that they could generate as many as 250,000 new jobs. 

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