What's in the new UK energy bill?

Timon Singh

When the UK coalition government was first announced there were concerns that with the differences in Liberal Democrat and Conservative agendas not much would be achieved, but a whole host of green initiatives were unveiled for the country in the Queen's speech yesterday indicating common ground in terms of renewable energy. But what overhauls are to be implemented in the proposed new UK energy bill?

Firstly, the new government headed by Conservative David Cameron aim to see the creation of a green investment bank that would loan individual households the money to invest in carbon-reducing measures, including insulation. The bank will also allow more households to invest in renewable technology such as solar panels in order to reduce carbon emissions.

Expanding on a plan implemented by the former Labour government, the 'green household scheme' essentially creates a 'pay-as-you-save' approach to cutting emissions, by making homeowners invest in technology to make their homes greener, repaying the loan using money saved through lower energy bills. Previously, Labour wanted to create a GBP£2 billion fund, but those figures may not be valid now. In the past, the Conservatives have cited loans of GBP£6,500 for each home, while the Lib Dems have suggested up to GBP£10,000 should be made available.

UK energy bill measures

Other initiatives planned for the new UK energy bill include measures to;

• Require energy companies to provide more information on energy bills in order to empower consumers and to ensure fair access to energy supplies.

• Regulate the carbon emissions from coal-fired power stations.

• Reform energy markets to deliver security of supply and ensure fair competition.

• Put in place a framework to guide the development of a smart grid that will revolutionise the management of supply and demand for electricity.

• Ensure that North Sea infrastructure is available to all companies to ease the exploitation of smaller and more difficult oil and gas fields.

The North Sea is of vital importance as EU Infrastructure has stated in the past, not just to the UK but to the entire continent. The part of the bill that eases the over-drilling of smaller, more difficult sites has been welcomed by many.

Deloitte has been quoted as saying, "We note from the Queen's Speech that the Department of Energy and Climate Change (DECC) may include measures in the forthcoming Energy Bill to ensure North Sea infrastructure would be available to all companies to ease the exploitation of smaller and more difficult oil and gas fields. We welcome this and would positively encourage the development of legislation in this area."

"Whilst North Sea infrastructure is not seen by many as of immediate importance to the UK economy, the widest possible access to that infrastructure is critical if the UK is to maximise the value and recovery of its indigenous oil and gas reserves and ensure that smaller and more difficult accumulations of hydrocarbons are not left stranded offshore."

"In order to prolong the life of the North Sea and to maximise the recovery of reserves, the current voluntary infrastructure code of practice (ICOP) needs to be reviewed. Consideration could potentially be given to compulsory arbitration, with a fixed timetable to encourage wider and faster access to both ageing and new infrastructure. In addition thought needs to be given to the extent to which infrastructure owners are required to operate and maintain that infrastructure well beyond the lives of the fields to which it originally related. Incentives to encourage the sale and purchase of infrastructure provided through the North Sea oil and gas tax regime could facilitate this process."

Chris Huhne, the new energy and climate change secretary, said of the new UK energy bill proposals, "The Queen's speech makes clear that energy security and taking real action to tackle climate change aren't add-on extras for this new government, but are vital to our national interest.

"The energy bill is designed to help consumers put a stop to wasting energy in their homes through a green deal while making sure our energy system is fit for the 21st-century."

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