UK Energy Bill gets mixed reactions from businesses

29 November 2012 (Last Updated November 29th, 2012 18:30)

The UK Energy Bill has received mixed reactions from businesses operating in the country.

UK_Houses of Parliament

The UK Energy Bill has received mixed reactions from businesses operating in the country.

The Secretary of State for Energy and Climate Change Ed Davey introduced the bill in Parliament on Thursday after months of speculation over its contents.

Under the legislation, energy firms will be authorised to triple the amount of money they add to customers' bills to pay for renewable power, nuclear and other environmental measures.

The bill will support the construction of a diverse mix of renewables, gas, CCS, and new nuclear, but there will be no electricity decarbonisation target for 2030 and a decision on this has been pushed back until 2016.

"The Energy Bill will attract investment to bring about a once in a generation transformation of our electricity market, moving from predominantly a fossil-fuel to a diverse low-carbon generation mix," Davey said.

The Carbon Capture and Storage Association, the Nuclear Industry Association, and RenewableUK, which together represent more than 1,000 corporate members, said the proposals for electricity market reform would help unlock billions in investment in low carbon generation.

RenewableUK policy director Dr Gordon Edge said: "So far, this bill is on track and on schedule, but we can't afford any slippage if we are to avoid a hiatus in investment around 2017, when the financial support mechanism switches from the Renewables Obligation to Contracts for Difference."

CBI director-general John Cridland hailed the efforts of government in opening up doors for energy-intensive manufacturing, and the welcome boost the bill would give to investor certainty.

"The Energy Bill will attract investment to bring about a once in a generation transformation of our electricity market, moving from predominantly a fossil-fuel to a diverse low-carbon generation mix."

"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," Cridland added.

While welcoming the bill, the Renewable Energy Association (REA) sought clarification from the government on how funds under the Levy Control Framework will be allocated across renewables, nuclear, CCS and other energy efficiency measures.

However, the Institution of Mechanical Engineers Power Division chairman Alistair Smith questioned the lack of a decarbonisation target.

"Although the majority of measures being announced today are positive, and should enable us to meet our 2020 EU renewables obligation, the lack of an emissions target for 2030 leads to longer term uncertainty on clean energy investments," he said.

Alstom UK president Steve Burgin agreed and added: "While being an important first step, we believe we need to get on with setting the actual figure; leaving it until 2016 presents the risk of reducing both the scale and pace of much needed long-term investments."

Solar Trade Association photovoltaic specialist Ray Noble expressed the need for a solar power strategy in the UK, which already has a gas strategy in place.

"That strategy should focus on removing unfair barriers to solar power, such as obstacles to grid access, he said. "It should also set out a pathway to grid parity to empower millions of people to take control of their energy bills."

Pointing out the challenges for the bill, WSP Group director David Symons commented: "There remains a significant gap between the situation today and the government's aspirations to reduce total energy use by 12% by 2020."


Image: UK energy secretary Ed Davey introduced the Energy Bill on Thursday to UK Parliament, which received mixed reactions from businesses and associations.