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Energy Bill 'does nothing' to solve uncertainty

The draft Energy Bill has failed to provide the firm commitment to renewables crucial to lever in finance for energy-from-waste (EfW) projects, industry chiefs have told MRW.  

Sector bodies expressed disappointed that renewable energy was not handed more prominent billing when the long-awaited Bill (see box) was unveiled this week.

Renewables Energy Association (REA) chief executive Gaynor Hartnell said the new arrangements - aimed at finding tens of billions of pounds of investment in nuclear and low-carbon energy - could make firms “anxious”.

She told MRW: “Many in the industry would rather the Renewables Obligation just carried on but you can understand why the Government would want to limit the price paid by consumers.

“If renewables do get stable prices and it all works then it’s not a bad outcome but many in the industry need to be reassured that it will work.”

Anaerobic Digestion and Biogas Association policy manager Matt Hindle said: “The Government needs to put more emphasis on what part renewables will play in the future energy mix and ensuring that we are meeting our future energy needs through fully renewable technologies.

“The bill has not done anything to solve the uncertainty in the market.”

Hindle said ensuring the certainty to allow firms to attract finance and support would be crucial for the Government to meet the renewable energy targets set out for 2020 and 2030.

The Environmental Services Association said it would take more time to establish the full impact on the sector because of the complexity of the 307-page Bill but stressed its potential importance to major waste management companies.

The Renewable Energy Foundation said the plans were “simply not credible”.

REF director John Constable said: “Electricity Market Reform will invisibly load bills with extremely expensive subsidies to force low carbon investment ahead of the learning curve in order to meet arbitrary targets.

“This is technically reckless but will ultimately fail because of consumer resistance to costs.”

Greenpeace said the Bill was a “shambles” and would deter investment in renewables.

Joss Garman, senior energy campaigner for the campaign body, said:  “The Government should also have backed our home-grown renewable energy industry, but instead this shambles of a bill will make it harder to invest in this important sector.

“Supporting this vital industry would boost the economy and reduce consumers’ exposure to rocketing gas prices.”

The draft Energy Bill

Ministers said the bill would put in place measures to attract the £110bn investment needed to replace current generating capacity and upgrade the grid by 2020.

Energy secretary Edward Davey said: “These reforms will ensure we can keep the lights on, bills down and the air clean.

“The reforms will also be better for the economy, leaving us less vulnerable to rising global energy prices and supporting as many as 250,000 jobs in the energy sector.”

The Bill will be designed to encourage a balanced portfolio of renewables, new nuclear and carbon capture and storage (CCS), and to ensure that these technologies can compete fairly in the market-place.

It will introduce:

  • Contracts for Difference: long-term instruments to provide stable and predictable incentives for companies to invest in low-carbon generation;
  • Investment Instruments: long-term instruments to enable early investment in advance of the CfD regime coming into force;
  • Capacity Market to ensure the security of electricity supply;
  • Conflicts of Interest and Contingency Arrangements to ensure the institution which will deliver these schemes is fit for purpose;
  • Renewables transitional arrangements for investments under the renewables obligation scheme; and
  • Emissions Performance Standard – to limit carbon dioxide emissions from new fossil fuel power stations.

The Energy Bill will also improve regulatory certainty by ensuring that the Government and Ofgem are aligned at a strategic level through a Strategy and Policy Statement, as recommended in the Ofgem Review of July 2011.

It places the interim Office for Nuclear Regulation (ONR) on a statutory footing as the body to regulate the safety and security of the next generation of nuclear power plants. This includes setting out the ONR’s purposes, regulations and functions.

The draft BIll also includes provisions to enable the sale of the Government pipe-line and storage system (GPSS). This includes providing for the rights of the secretary of state in relation to the GPSS, registration of those rights, compensation in respect of the creation of new rights or their exercise, and for transferral of ownership, as well as powers to dissolve the Oil and Pipelines Agency by order

All the documents can be found here.

Source: Department of Energy and Climate Change

 

 

 

 

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