Presentation Transcript

1. Energy Bill Alex CookeDECC Legal A B I L L [AS AMENDED IN PUBLIC BILL COMMITTEE] TO
2. Energy Bill 2012-13 Part 1: Decarbonisation Part 2: Electricity Market Reform Chapter 1: General considerations Chapter 2: Contracts for Difference Chapter 3: Capacity Market Chapter 4: Investment contracts Chapter 6: Access to Markets Chapter 7: RO Transitional arrangements Chapter 8: Emissions Performance standard Part 3: Nuclear Regulation
3. Energy Bill 2012-13 Part 4: Government Pipeline and Storage System Part 5: Strategy and Policy Statement Part 6: Consumer Protection and Miscellaneous Chapter 1: Consumer Protection Domestic tariffs Consumer redress Chapter 2: Miscellaneous Offshore transmission Fees
4. Energy Bill 2012-13 Overview A “carry-over” Bill, starting in the House of Commons Introduction:29th November 2012 2nd Reading: 19th December 2012 Committee: 15th January to 7th February 2013 Report: ??? References to part, chapter and clause numbers are to those in the Bill as amended in Committee
5. Energy Bill 2012-13 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. 2016 calculation of carbon intensity uses standard international carbon reporting methodology
6. Energy Bill 2012-13 Part 2: Electricity Market Reform contracts for difference capacity market investment contracts conflicts of interest access to markets renewables obligation transition emissions performance standard
7. Energy Bill 2012-13 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
8. Energy Bill 2012-13 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
9. Energy Bill 2012-13 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 What is a CFD? Graphs to go here
10. Energy Bill 2012-13 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
11. Energy Bill 2012-13 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
12. Energy Bill 2012-13 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
13. Energy Bill 2012-13 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
14. Energy Bill 2012-13 EMR: RO transition transitional phase where generators can choose between the RO and the CFD it is proposed that the transition will end on 31st 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
15. Energy Bill 2012-13 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
16. Energy Bill 2012-13 Part 3: Nuclear regulation establishes the Office for Nuclear Regulation ONR’s 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
17. Energy Bill 2012-13 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
18. Energy Bill 2012-13 Part 5: Strategy and Policy Statement new statement to set out Government’s 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
19. Energy Bill 2012-13 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
20. Energy Bill 2012-13 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
21. Energy Bill 2012-13 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
22. Energy Bill 2012-13 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
23. Energy Bill 2012-13 Bill information Parliament’s Bill website http://services.parliament.uk/bills/2012-13/energy.html Links on the left of the page provide more information, including links to evidence, debates and amendments
24. Energy Bill 2012-13 Bill information DECC’s Bill website https://www.gov.uk/government/organisations/department-of-energy-climate-change/series/energy-bill Overview and links to impact assessments, statements and publications
25. Energy Bill 2012-13 Bill information DECC’s 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