New Energy Bill gets behind CCS and gives more powers to Ofgem

The bill, introduced into Parliament this week, has been described by Government as an “ambitious routemap for a move to a low carbon economy”, while cutting emissions, maintaining energy security and protecting the country’s most vulnerable households.

The CCS Incentive includes a £9.5 billion levy on electricity suppliers to fund up to four commercial-scale CCS demonstration projects in the UK, while providing funding for the retrofit of demonstration projects to their full capacity, should this be required in future.

The Energy Bill also aims to strengthen the UK’s “leadership position in the development of clean coal technologies”, which the Government believes could bring between £2 billion to £4 billion a year into the UK economy by 2030, and support between 30,000-60,000 jobs in sectors such as engineering, manufacturing and procurement.

Energy regulator Ofgem, meanwhile, has been given new responsibilities in the bill to step in proactively to protect consumers as well as considering longer term actions to promote competition.

It is also being given additional powers to tackle market exploitation where companies might take advantage of constraints in the electricity transmission grid.

The market regulator will now also be able to extend the time limits over which it can impose financial penalties for breaches of licence conditions from 12 months to five years.

The number of households living with fuel poverty is likely to reach 4.6 million by the end of the year, according to the Government, and the new Energy Bill aims to tackle this by providing mandatory social price support, such as in the form of an electricity bill rebate. The Government says this will build on the voluntary agreement with energy companies, which ends in 2011, and will be greater than the £150 million committed by suppliers in the final year of the agreement

Energy and Climate Change Secretary Ed Miliband 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.”