The Energy Bill received Royal Assent yesterday, becoming the Energy Act 2010.
The main elements of the new Act are:
- Carbon capture and storage (CCS) – delivering a new financial incentive to bring forward four commercial scale demonstration projects on coal-fired power stations and to support the retrofit of additional CCS capacity to those projects should it be required at a later date.
- Mandatory social price support – creating a framework to mandate energy companies to provide support to the fuel poor, including 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.
- Clarifying Ofgem’s remit – making it clear that Ofgem must:
- include the reduction of carbon emissions and the delivery of secure energy supplies in their assessment of the interests of consumers
- step in proactively to protect consumers as well as considering longer term actions to promote competition
- Tackling market power exploitation – giving Ofgem additional powers to tackle market exploitation where companies might take advantage of constraints in the electricity transmission grid.
Other measures are:
- Requiring the Government to prepare regular reports on the progress made on the decarbonisation of electricity generation in Britain and the development and use of CCS.
- Extending the time limit from 12 months to 5 years within which Ofgem can impose financial penalties on energy suppliers for breaches of licence conditions.
- Allowing the Government to set the period within which energy companies must inform customers of changes to their gas and electricity tariffs.
- Enabling action to be taken against unfair cross-subsidy between gas and electricity supply.
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