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Energy Bill Alex Cooke DECC Legal A B I L L [AS AMENDED IN PUBLIC BILL COMMITTEE] TO.

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Presentation on theme: "Energy Bill Alex Cooke DECC Legal A B I L L [AS AMENDED IN PUBLIC BILL COMMITTEE] TO."— Presentation transcript:

1 Energy Bill Alex Cooke DECC Legal A B I L L [AS AMENDED IN PUBLIC BILL COMMITTEE] TO

2 P ART 1: D ECARBONISATION P ART 2: E LECTRICITY M ARKET R EFORM C HAPTER 1: G ENERAL CONSIDERATIONS C HAPTER 2: C ONTRACTS FOR D IFFERENCE C HAPTER 3: C APACITY M ARKET C HAPTER 4: I NVESTMENT CONTRACTS C HAPTER 6: A CCESS TO M ARKETS C HAPTER 7: RO T RANSITIONAL ARRANGEMENTS C HAPTER 8: E MISSIONS P ERFORMANCE STANDARD P ART 3: N UCLEAR R EGULATION Energy Bill

3 P ART 4: G OVERNMENT P IPELINE AND S TORAGE S YSTEM P ART 5: S TRATEGY AND P OLICY S TATEMENT P ART 6: C ONSUMER P ROTECTION AND M ISCELLANEOUS C HAPTER 1: C ONSUMER P ROTECTION Domestic tariffs Consumer redress C HAPTER 2: M ISCELLANEOUS Offshore transmission Fees

4 Overview A carry-over Bill, starting in the House of Commons Introduction:29 th November nd Reading:19 th December 2012 Committee:15 th January to 7 th February 2013 Report:??? References to part, chapter and clause numbers are to those in the Bill as amended in Committee Energy Bill

5 Part 1: Decarbonisation power to set a target range by order duty on Secretary of State to ensure that carbon intensity of GB electricity generation does not exceed the upper limit of the target range decarbonisation target range cannot be set before 5th carbon budget, i.e calculation of carbon intensity uses standard international carbon reporting methodology Energy Bill

6 Part 2: Electricity Market Reform contracts for difference capacity market investment contracts conflicts of interest access to markets renewables obligation transition emissions performance standard Energy Bill

7 EMR: General considerations duties in relation to carbon targets and budgets renewables target security of supply cost to consumers duty to meet a decarbonisation target ??? Part 2, Chapter 1, clause 5 Energy Bill

8 EMR: Contracts for difference contracts between a generator and a counterparty available to low carbon generators counterparty a government owned company counterparty liabilities funded by a levy on suppliers contracts entered-into following a direction from the Secretary of State or the national system operator Part 2, Chapter 2, clauses 6 to 20, Schedule 1 Energy Bill

9 What is a CFD? generators are paid the difference between a strike price and a reference price if the reference price exceeds the strike price, the generator pays money back Energy Bill Graphs to go here

10 EMR: Capacity market total amount of capacity required at peak times, including a margin, is calculated payments are made to people who enter agreements to be available at peak times the amount payable will be determined by auction money flows from suppliers to generators; penalties for non-compliance flow back role for Demand Side Response – in a pilot scheme at first. Part 2, Chapter 3, clauses 21 to 32 Energy Bill

11 EMR: Investment contracts investment contracts are CFDs for people who have to take final investment decisions fairly soon contracts are entered into by the Secretary of State and laid before Parliament if entered into before Royal Assent, they are conditional on Royal Assent contracts will be transferred to the CFD counterparty Part 2, Chapter 4, clause 33, Schedule 2 Energy Bill

12 EMR: Conflicts of interest the national system operator, National Grid, is the EMR delivery body power to put in place business separation arrangements to manage conflicts of interest power to transfer delivery functions to another person in certain situations amendment of special administration regime Part 2, Chapter 4, clauses 34 to 37, Schedule 3 Energy Bill

13 EMR: Access to markets power to improve electricity market liquidity if Ofgem proposals are inadequate or fail power to take action to improve the availability of Power Purchase Agreements, if necessary PPAs should be simpler with CFD scheme much talk of a Green Power Auction Market to provide PPAs and a reference price at the same time Part 2, Chapter 6, clauses 38 to 40 Energy Bill

14 EMR: RO transition transitional phase where generators can choose between the RO and the CFD it is proposed that the transition will end on 31 st March 2017 power to put in place arrangements from 2027 for certificates to be bought at a fixed price Part 2, Chapter 7, clause 41 Energy Bill

15 EMR: Emission performance standard the EPS limits the total amount of emissions from a power station in a year – effectively to 450 g/kWh it will prevent new coal stations without CCS fitted but it will allow new, efficient gas generating stations stations which have already been consented are unaffected Part 2, Chapter 8, clauses 42 to 46, Schedules 4 & 5 Energy Bill

16 Part 3: Nuclear regulation establishes the Office for Nuclear Regulation ONRs role is to regulate the safety and security of next generation of nuclear power stations also deals with transport of nuclear materials, nuclear security and safeguards more generally Part 3, clauses 51 to 100, Schedules 6 to 13 Energy Bill

17 Part 4: GPSS the Government Pipeline and Storage System is used to transport aviation fuel around the country much of the GPSS was built on private land statutory powers these provisions will regularise ownership and rights makes it possible for ownership to be transferred Part 4, clauses 101 to 112, Schedule 13 Energy Bill

18 Part 5: Strategy and Policy Statement new statement to set out Governments strategic priorities for the energy sector aim is to align strategic objectives of the Government and the regulator, Ofgem will replace existing guidance on social and environmental matters Part 5, clauses 113 to 120 Energy Bill

19 Part 6: Consumers and misc. Consumer protection domestic tariffs consumer redress Miscellaneous offshore transmission fees Part 6, Chapter 8, clauses 121 to 130, Schedule 14 Energy Bill

20 Domestic tariffs energy prices have been rising for several years, but switching rates remain low powers enabling the Secretary of State to simplify domestic tariff structures enable Secretary of State to require suppliers to move consumers off dead tariffs Part 6, Chapter 1, clauses 121 to 124 Energy Bill

21 Consumer redress Ofgem has long been able to fine energy companies which breach licence conditions, but has no power to require them to compensate consumers new powers will enable Ofgem to make consumer redress orders capped at 10% of turnover Part 6, Chapter 1, clause 126, Schedule 14 Energy Bill

22 Offshore transmission removing the requirement for a licence during the commission period for offshore transmission Fees fee recovery for almost all government costs relating to nuclear decommissioning Part 6, Chapter 2, clauses 127 to 129 Energy Bill

23 Bill information Parliaments Bill website Links on the left of the page provide more information, including links to evidence, debates and amendments Energy Bill

24 Bill information DECCs Bill website https://www.gov.uk/government/organisations/depart ment-of-energy-climate-change/series/energy-bill Overview and links to impact assessments, statements and publications Energy Bill

25 Bill information DECCs EMR website https://www.gov.uk/government/policies/maintaining- uk-energy-security--2/supporting-pages/electricity- market-reform Links to more detailed publications on EMR Energy Bill


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