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Government publish draft energy bill

The UK Government has published a draft energy bill aimed at establishing a legislative framework for delivering secure, affordable and low carbon energy.

Date Posted 22 May 2012
Story Source Dr Matthew Aylott, NNFCC
Relevant Industries Bioenergy

Houses of ParliamentCentral to the government's plan is the Electricity Market Reform (EMR), a far reaching set of legislative reforms which hope to attract the £110 billion of investment needed to replace current generating capacity and upgrade the grid by 2020.

Ed Davey, Secretary of State for Energy and Climate Change, 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."

"By reforming the market, we can ensure security of supply for the long-term, reduce the volatility of energy bills by reducing our reliance on imported gas and oil, and meet our climate change goals by largely decarbonising the power sector during the 2030s," he added.

One of the major measures proposed by the EMR is an Emissions Performance Standard which would prevent construction of new power stations which emit more than 450g/kWh, i.e. the most polluting form of electricity generation. This would effectively rule out all coal power plants without carbon capture and storage (CCS) but would encourage the use of renewables, gas-fired plants and new nuclear.

Biomass should also benefit from the EMR but there are likely to be stricter rules to ensure compliance with sustainability criteria. This will be managed by the Gas and Electricity Markets Authority, who will regulate the Feed-in Tariffs with Contracts for Difference (FiT CfD), which will eventually replace the Renewables Obligation as the leading incentive for renewable energy starting in 2014.

This change will be phased in over time and the EMR sets the groundwork for implementation of transitional arrangements for the Renewables Obligation to ensure investor confidence is maintained during the transition period.

To help you better understand the impacts EMR will have on your business contact NNFCC, the UK's leading bioenergy consultants.

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