Decarbonisation targets are to be postponed until 2016 under the UK Government’s new Energy Bill, to be introduced next week.
According to the Government, the long-awaited Bill will ‘help to diversify [the UK’s] energy mix to avoid excessive gas import dependency by increasing the amount of electricity coming from renewables from 11% today to around 30% by 2020’.
The Government will allow energy companies to charge households an extra £7.6bn, to go towards low-carbon electricity infrastructure by 2020.
A decision about setting carbon emission targets for 2030 has been delayed until 2016, after the next general election.
The Bill will see the creation of a Government-owned company to act as a single counterparty ‘to give investors confidence to enter into new long term Contracts for Difference for low carbon electricity projects’.
The Bill will make it possible to introduce a capacity market, allowing for capacity auctions from 2014 for delivery of capacity in the winter of 2018/19, if needed, to help ensure the lights stay on even at times of peak demand.
On announcing the plans the energy and climate change secretary, Ed Davey, said: “The decisions we’ve reached… will allow us to meet our legally binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers.”
The details of the energy bill have been met with mixed reaction from environmentalists, with many praising the decision to increase support for renewables but expressing concern over the lack of a decarbonisation target.
“A missed opportunity”
Mark Kenber, CEO of The Climate Group
“The long-awaited Energy Bill, despite its positive elements and increased support for renewables, is a missed opportunity. It does not put emissions reduction at the heart of the UK’s energy policy. It does not put the UK on a long-term low-carbon, sustainable, clean energy path. The Bill is more of a grand compromise; and like all compromises it deals more with the present and the short-term than with the future.”
David Nussbaum, chief executive of WWF-UK
"The announcement by Ed Davey on the levy control framework is a step in the right direction which will at least give more confidence that the UK will meet its legally binding renewable energy target… However, the Government should have taken the next step and backed a decarbonisation target in this Bill and it is seriously disappointing that they did not.”
John Sauven, executive director of Greenpeace
“By failing to agree to any carbon target for the power sector until after the next election, David Cameron has allowed a militant tendency within his own ranks to derail the Energy Bill. It's a blatant assault on the greening of the UK economy that leaves consumers vulnerable to rising gas prices, and sends billions of pounds of clean-tech investment to our economic rivals.”
“Rock solid support” for renewable energy
Maria McCaffery, chief executive of RenewableUK
"This is a crucial announcement for the renewable energy sector. The news that there is rock solid support across Government for renewable energy, and clear evidence that Treasury and the Department of Energy and Climate Change are in step, provide the industry with exactly the kind of assurances we've been calling for"
Gaynor Hartnell, chief executive of the Renewable Energy Association
“The commitment of the necessary budget for the renewable power sector to meet its share of the 2020 targe, is very welcome news… Today’s announcements finally give a suggestion that the Government is getting behind the renewables agenda, which promises 400,000 green jobs across power, heat and transport by 2020, along with a much more secure energy future”
Angela Knight, chief executive of Energy UK
"This agreement is good news and we look forward to seeing the details of the Bill…We are pleased to see that the levy control framework means that the UK will be building new power stations, including nuclear and renewables. This is a huge investment and must bring forward the jobs and economic growth that the UK needs."
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