New Energy Act to Bring in Billions in Investment for UK
By Anne Lewis-Schneider
The Energy Bill has received Royal Assent which it is hoped will be the gateway to more investments in the UK with the new Energy Market Reform (EMR), bringing in much needed revenue from the private sector to the tune of a hopeful £110 billion. The delivery plan for the EMR as set out by the Department for Energy and Climate Change (DECC), aims to bring in billions in new private investments between now and 2020. These funds will be used to replace old coal burning power stations that are in the process of being decommissioned and also in building the grid infrastructure to be able to cope with more low carbon emissive energy and a wider variety of energy.
The two elements that have been brought into the Energy Market Reform are the Capacity Market and the Contracts for Difference (CfD). The CfD will operate alongside the renewables obligation that is presently in operation and will in effect give a guaranteed minimum price for electricity in the long term. This is expected to come into being early in 2014. On the other hand the Capacity Market will protect the consumer by ensuring an adequate flow of electricity to which energy producers will have to agree and abide by or face stiff fines. The DECC has said that they will deliver a new EMR every five years, and that this particular EMR is hoped to ease the change over from the current renewables obligation.
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