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Mixed reaction to energy bill

Firms and trade bodies welcomed the government’s commitment to renewable energy in the new bill released yesterday but said further details on funding allocation were still needed.

Trade body Renewable Energy Association (REA) has welcomed the establishment of a government owned company to act as counterparty for contracts for difference (CfDs) - a long term contract between energy suppliers and government ensuring a minimum price of electricity - to ensure that the contracts are “legally secure and bankable.”

But the body wants to see a government explanation of how the funds will be allocated.

“The devil will be in the detail, which we have yet to fully examine,” said REA chief executive Gaynor Hartnell. “However, if the new regime is implemented sensitively, consumers and green generators should both win.”

Energy firm EdF, which plans to build two new nuclear reactors in Somerset, praised the bill as “a defining moment for UK energy policy and demonstrates a real commitment to create the right conditions to give the UK a secure, low carbon energy supply for the future”.

But consultants EC Harris and WSP expressed doubts over the bill.

Cost consultant EC Harris said that the decision to put off introducing a binding 2030 decarbonisation target before 2016 could unsettle investors, and that the biggest barrier to securing private finance comes in 2013 when the government makes a decision on the level of subsidies it makes available for renewables and new-build nuclear schemes.

It added: “The new measures being introduced suggest that keeping the lights on and the economy on an even keel have trumped the green agenda for the time being.”

WSP director David Symons said: “There remains a significant gap between the situation today and the government’s aspirations to reduce the total energy use by 12% by 2020.”

“Just last month, Decc (the Department for Energy and Climate Change) predicted that, with existing policies, total energy use across the UK would barely change over the next 18 years, rising slightly in both domestic (3%) and commercial (9%) sectors.”

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