Energy Bill becomes law
The Energy Bill has now passed into law having received Royal Assent.
Central to the Bill is the government’s Electricity Market Reform
(EMR) package which can now swing into action after passing this
fi nal legislative hurdle.
By guaranteeing clean energy producers a minimum price for the
electricity they supply (known as Contract for Difference), the aim of
EMR is to unlock the £110bn of private investment needed by 2020 to
replace ageing fossil fuel generation capacity with greener alternatives.
The Department of Energy and Climate Change (DECC) estimates
that the measures will create over 200,000 jobs in the renewables
sector and reduce carbon emissions by 20 million tonnes – 25 percent
of current annual household emissions.
Industry bodies the Renewable Energy Association and
RenewableUK both greeted the news as a welcome boost to the clean
energy sector.
REA chief executive, Dr Nina Skorupska, said: “The complexity of
EMR has been well documented. Government, and especially DECC, is
therefore to be congratulated on succeeding in bringing the Energy Act
Nature’s
law: The
Energy Bill
is designed
to mobilise
£110bn of
private
investment
in low carbon
alternatives
to retiring
fossil fuel
power
stations
in on time. This is a major step forward for realising the huge jobs and
growth potential in home-grown, climate-friendly renewable power.”
Maria McCaffery, RenewableUK‘s chief executive, said: “This has
been a long and sometimes arduous process for everyone involved but
we recognise that the Energy Bill has now become legislation and the
framework for development beyond 2017 is known.
“Developing our domestic energy sources protects us from
fl uctuating fossil fuel prices, and could create tens of thousands of
highly-skilled jobs over the next decade.”
Government offers fracking tax boost
Councils that allow drilling for shale gas will be able to keep 100
percent business rates, the prime minister has confi rmed.
David Cameron made the announcement on January 13 that local
authorities could collect all business rates from fracking sites – as
opposed to the usual 50 percent.
Communities will also be given £100,000 and 1 percent of
revenues per site if shale gas can be extracted.
Cameron predicts that fracking could create 74,000 jobs in the UK
and reduce energy bills by supplying all the country’s gas needs for the
next two or three decades.
Although offering all business rates to local authorities puts the
fi nancial incentives for granting planning permission for fracking on
a par with large renewable energy projects, the community benefi ts
package is substantially less than some renewable developers offer.
For example, solar developer and green energy supplier Good
Energy typically offers £1,000 for every MW produced – a deal worth
up to £25,000 for communities every year for 30 years. RES offers local
residents an annual discount of at least £100 on electricity bills if they
live in close proximity to a solar or wind farm.
Community payments for shale gas could be expected to peak
within the fi rst 10 years of a well’s operation before sharply tailing off.
Environmental groups and green energy installers have
criticised the payments as tantamount to bribery for councils to allow
destruction of the countryside and the possible risk of earthquakes.
There is also dismay that fracking should be given such
encouragement by the government in the face of mounting public
opposition.
Friends of the Earth said: “Fracking sweeteners highlight the
depth of opposition to fracking and lengths the government will go to
overcome it.”
Great debate: Despite public opinion being against hydraulic fracturing,
David Cameron hopes to make it a central part of energy policy in the UK
Rupert Higgin, md of TGE Group, added: “Cameron’s
announcement comes at a time when the government is cutting
subsidy payments for renewable energy produced, so effectively
robbing Peter to pay Paul?
“With the opportunity to develop some of the most outstanding
clean energy resources in the world, it seems inconceivable that the
‘greenest government ever’ looks to be heading, once again, down the
carbon paved road towards fossil fuels.”
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