The Energy Bill yesterday received Royal Assent meaning it has made the transition into becoming the Energy Act 2010.
The Act focuses on the government’s commitment to developing clean coal, creating clarity over Ofgem’s remit and powers and ensuring support for the fuel poor.
To ensure clean coal, the government is creating financial incentives to ensure carbon capture and storage (CCS) is ready for wider deployment from 2020 and that any new coal plant constructed from then to be fully CCS from day one.
Four commercial scale CCS demonstration projects are planned for coal-fierd power stations and this is expected to retrofit CCS to their full capacity by 2025 - enabled by the financial support from the government. The demonstration projects were first announced in the 2009 Budget.
Clarification over Ofgem’s remit will now include the reduction of carbon emissions and the delivery of secure energy supplies in its assessment of the interests of consumers, while it will also be required to step in proactively to protect consumers as well as considering longer term actions to promote competition.
Ofgem additional powers to tackle market exploitation where companies might take advantage of constraints in the electricity transmission grid. The regulator will also benefit from an extention on the time limit from 12 months to 5 years within which it can impose financial penalties on energy suppliers for breaches of licence conditions.
The Act will also create mandatory social price support through a framework to mandate energy companies to provide support to the fuel poor. It will include powers to give greater guidance and direction on the types of households eligible for future support and the type of support they should be given.
Other measures in the Act mean that the government will have to prepare regular reports on the progress made on the decarbonisation of electricity generation in Britain and the development and use of CCS.