United Kingdom

United Kingdom

UK energy reform bill signed into law

UK: The UK's Department for Energy and Climate Change (Decc) has released its delivery plan for the reforms resulting from the electricity market reform (EMR) bill.

The bill was passed through parliament before being given royal assent
The bill was passed through parliament before being given royal assent

Decc announced that ten of the 16 renewables projects that had qualified for the "final investment decision enabling for renewables" (Fider) process, had been informed they were "provisionally affordable".

This includes offshore projects Burbo Bank, Hornsea, Dudgeon and the Walney Extension, as well as onshore projects Beinn Mhor in Scotland and Hecklington Fen in Lincolnshire, England.

Athough the bill was signed off by the Queen yesterday, there are still a number of details to be revealed.

The plan proposes for the first time that "more mature" renewable technologies, including onshore wind, could be opened up to competition through auctions.

The government said that it is considering the move to comply with EU regulations and will make a decision in early 2014.

It is unclear how this would work with the reform's contract for difference regime, which will see renewable energy producers paid a fixed price above the market rate.

Wind industry body RenewableUK reacted negatively to the announcement, with deputy chief executive Maf Smith saying: "Auctions being introduced at the start of the regime in 2014 risks sending shockwaves through the industry.

"Plunging onshore wind into an auction process adds more risk and could be severely detrimental."

The government also announced that seven wind projects have been told that they are provisionally affordable under the budget caps announced on 4 December.

The wind farms that have passed to the next stage of the final investment decision enabling for renewables system include offshore projects Burbo Bank, Dungeon, Hornsea and Walney.

Two onshore projects with a combined capacity of 71MW were also issued with the draft contracts.

Decc said that the reforms are aimed at spurring £110 billion (EUR 131 billion) of investment in the energy market.

But the expected level of investment as a result of the reforms has been called into question. Research from Bloomberg New Energy Finance showed that the UK is in danger of missing its reduced 2020 offshore wind target as it fails to draw in the level of investment needed.

The research claims the government will struggle to secure the £20 billion needed to install the 10GW of offshore wind by 2020 due to uncertainty for investors in the EMR.

Energy and climate change secretary Edward Davey said: "We have driven the energy bill through parliament on time to send out a clear signal to investors and industry.

"We have delivered the certainty they need and confirmed Britain's position as one of the most attractive countries in the world to invest in energy generation."

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