by Brianna Crandall — December 3, 2012—An energy bill was introduced to the British Parliament on November 19 that is considered essential legislation to power low-carbon economic growth, to protect consumers, and to keep the lights on. Following two years of extensive consultation and pre-legislative scrutiny, the Bill reportedly sets out radical reforms to the design of the electricity market that are expected to kick-start a renaissance in construction of low-carbon energy infrastructure and in low-carbon manufacturing supply chains.
During the passage of Energy Bill 2012-13, proposals will be added to ensure energy companies help consumers to get on the best energy tariff, and to promote energy efficiency through electricity-demand reduction.
The Department of Energy and Climate Change (DECC) is seeking views on a number of key proposals to reduce electricity demand across the whole U.K. economy, including:
Financial incentives—market wide initiatives:
- Premium payments—payments for each kilowatt-hour (kWh) conserved through energy-saving measures installed such as energy-efficient lighting.
- An energy supplier obligation in the non-domestic sector—ensuring energy suppliers deliver a specific target of electricity demand reduction in the non-domestic sector to complement the Energy Company Obligation to reduce carbon emissions that is targeted at households.
- Demand reduction included in the capacity market as part of electricity market reform—as part of proposed reforms to the electricity market to be set out in the Energy Bill, the government wants to ensure there is sufficient electricity capacity to keep the lights on, even at times of high demand. This consultation looks at whether there is scope for people to participate in this market by committing to permanent reductions in electricity use and so reduce the amount of electricity that needs to be produced.
Financial incentives—programs targeted at specific sectors:
- Financial incentives to encourage uptake of energy efficient equipment in homes and businesses—incentives to replace older, less efficient technologies with new, more efficient equipment such as lighting, pumps and motors, specifically targeted at different sectors.
Nonfinancial incentives:
- Voluntary programs and better energy efficiency information—clearer energy efficiency information to reduce demand, including an energy efficiency information “hub” for the industrial sector and better labeling on products. The consultation looks at whether a program to recognize achievements by organizations who commit to buying only highly efficient products could help drive reductions in electricity use.
Along with the introduction of the Energy Bill, the Government announced its intention to exempt energy-intensive industries from additional costs arising from new long-term “contracts for difference” designed to bring on investment in low carbon power plant such as nuclear power stations and wind farms. A separate £250 million plan to compensate certain energy-intensive industries for additional costs associated with the Carbon Price Floor and E.U. Emissions Trading System is already the subject of a current consultation.
