The bill also introduces a new financial incentive for carbon capture and storage (CCS) to support the construction of up to four commercial-scale CCS demonstration projects in the UK. The CCS Incentive could also provide funding for the retrofit of demonstration projects to their full capacity, should it be required in future, added DECC.
This bill will strengthen the UK’s position in the development of clean coal technologies that could bring between GBP2-4 billion a year into the UK economy by 2030, and support between 30,000-60,000 in jobs such as engineering, manufacturing and procurement.
The energy bill also gives energy market regulator Ofgem, additional powers to tackle market exploitation where companies might take advantage of constraints in the electricity transmission grid.
According to the new bill, the energy market regulator must include the reduction of carbon emissions and the delivery of secure energy supplies in their assessment of the interests of consumers, and step in proactively to protect consumers and consider longer term actions to promote competition.
In addition, the bill will strengthen the deterrent nature of Ofgem’s powers by extending the time limit from 12 months to five years within which Ofgem can impose financial penalties for breaches of licence conditions.
Ed Miliband, secretary of state for Energy and Climate Change said: “The new energy bill is an example of the government taking direct action to ensure the markets work fairly and to help more of the most vulnerable with their fuel bills. It will ensure that consumers can be confident that British energy is sustainable and secure. Making the transition to a low carbon economy will be a challenge but this Bill will allow us to put in place key powers which will help us make the shift fairer for all.
“Carbon capture and storage is a key technology to tackle climate change, and 17 days ahead of the crucial talks in Copenhagen, this Bill sets up a new CCS Incentive to support the development of up to four commercial-scale CCS projects in the UK.”
DECC said that, by providing mandatory social price support, such as in the form of an electricity bill rebate, the bill will protect vulnerable households. This builds on the success of the voluntary agreement with energy companies which ends in 2011 and has helped reduce the fuel bills of more than one million vulnerable customer accounts.
The level of support to be provided through the new mandated scheme will be greater than the GBP150m committed by suppliers in the final year of the agreement.
