Policy & Market


Reaction to the launch of the UK's landmark Energy Bill

Today the UK published its long awaited Energy Bill, which hopes to lay the foundations for a massive increase in renewable and other low-carbon generation and deliver Prime Minister David Cameron's pledge to lead the "greenest ever government".

The Bill has set out more information on the mechanism that will will replace the current UK support regime, and already prompted a call for the existing Renewables Obligation scheme to be extended for three years while the new arrangements bed in.

Here is a selection of early reaction:

Tom Delay, chief executive of the UK's Carbon Trust: "The inclusion in the Energy Bill of a levy cap of up to £7.6bn a year, in today's money, by 2020 is welcome. It should provide far more certainty that new projects moving from their development to construction phase will have adequate revenues.

"However, until the detail of the strike price for the various technologies has been agreed and the relationship between the price, the capacity and the total cap is clarified it is too premature to fully welcome this measure. The price must be right to ensure projects receive adequate returns to be built quickly and at scale. Until the strike price is confirmed the freeze on investment in new large scale low carbon energy projects will continue and the Bill remains work in progress."

Renewable Energy Associaiton chief executive Gaynor Hartnell: “The devil will be in the detail, which we have yet to fully examine. However, if the new regime is implemented sensitively, consumers and green generators should both win.

“Electricity customers will only pay what is necessary to move the UK towards a more sustainable and secure energy future. That’s because, with these new contracts, if the price of electricity increases, the amount of subsidy required can fall. Generators should get a stable price, provided they achieve the fair market price for their electricity. That’s why it’s essential we have a route to market which guarantees this.

“We can’t afford to be complacent, however. It is vital that confidence in the policy framework is established quickly given the investment hiatus we face. There is still much work to do, to translate the legislation into clear and effective policy. We look forward to working closely with DECC to ensure our members can have full confidence in the new framework as quickly as possible.”

Maf Smith, deputy chief executive of RenewableUK: “This Bill is crucial in setting the investment framework for the next 20 years and ensuring that we can build on our current world lead in offshore wind and marine technologies, and guarantee clean domestic power and tens of thousands of green jobs”.

John Cridland, (Industry group) CBI director-general: “Energy-intensive manufacturing is finally getting its place in the sun today, by the exemption from necessary new energy costs. This is vital for such companies to play a key part in our low-carbon economy and it is good news that the Government has listened to our calls to build in support at this early stage, which will ensure we reap the full economic benefits at the earliest opportunity.

“Equally important is the welcome boost the Bill gives to investor certainty. It will be crucial for investors to see the momentum kept up in Parliament so that the Bill can get onto the statute books as quickly as possible.

Greenpeace nuclear campaigner Richard George: "The Coalition Agreement pledged not to subsidise new nuclear reactors. Yet the Energy Bill offers massive public subsidies to anyone willing to build new nuclear reactors. Such overt public subsidy may breach European Law and would force cash-strapped households and businesses to pick up the tab for this expensive and risky technology. Greenpeace's QC will be looking closely to see if the Government has broken the rules and put clean, safe renewable energy at an unfair disadvantage."

Dr Tim Fox, head of energy and environment at the UK's Institution of Mechanical Engineers: “With a looming energy gap for 2015, creating a stable regulatory framework for the energy sector is absolutely crucial for investor confidence and we look forward to the announcement next year on the details of the incentives, without further delays."

Angela Knight, chief executive of Energy UK: “This Energy Bill is a big and positive step forward. In its detail it must provide sufficient clarity and confidence for investors over the direction the UK is taking on energy policy. The capacity market proposals will mean that gas power stations will be there, not just to keep the lights on while the new nuclear power stations and renewables are being built, but also for the longer term future.

"This means that the huge investment will now start being made in our energy infrastructure and this will create jobs and help economic recovery. At the same time, a focus on affordability for households and for businesses of all sizes, now and during these changes, is essential."