UK companies welcome Energy Bill
30 November 2012
Would-be builders of new nuclear in the UK have welcomed the publication of long-awaited legislation to reform the UK energy market and encourage the development of a low-carbon energy infrastructure. Meanwhile, France has launched a national debate in preparation for its own energy transition legislation.
The Energy Bill, formally introduced to parliament by UK energy and climate change secretary Ed Davey, has been drawn up after two years of preparations including extensive consultation and pre-legislative scrutiny. The reforms to the design of the UK electricity market set out in the bill are intended to kick-start a renaissance in the construction of a low-carbon energy infrastructure and manufacturing supply chains. A draft version of the legislation was published in May.
The contents of the bill are of particular interest to those companies working towards building new nuclear power plants in the UK, not least because of the introduction of contracts for difference (CfD), which stabilise revenues for investors in low-carbon generation such as renewables, nuclear and CCS-equipped plant, helping them to secure the upfront investment needed for low-carbon generation construction projects. Returns for generators are stabilised at a fixed level known as a strike price.
It has long been recognised that the contents of the Energy Bill are likely to be influential on EDF Energy's forthcoming investment decision on a planned new nuclear power plant at Hinkley Point C. The company said key measures it had been looking to see in the bill, including a robust legal framework for CfDs, had been met. "Our first examination of the detail ... gives us confidence that the Bill represents a significant step forward," the company said in a statement. EDF Energy chief executive Vincent de Rivaz described the publication of the bill as a "defining moment". As well as Hinkley Point C, for which a site licence was granted only days ago, EDF Energy has recently launched a public consultation for the construction of a new nuclear plant at Sizewell C.
Alan Raymant, chief operating officer of Horizon Nuclear Power, also welcomed the publication of the bill and the accompanying CfD framework, which he described as critical in allowing developers to progress projects. Horizon, which has now been acquired by Hitachi of Japan, has sites suitable for new nuclear plants at Wylfa and Oldbury.
The Energy Bill is expected to receive royal assent in 2013, subject to its passage through parliament, meaning that the market reforms should be fully up and running in 2014.
France consults
France's energy and environment minister Delphine Batho has formally launched a national period of debate to help it to formulate its new energy policy. The so-called energy transition debate will be steered by a national council of academics and other experts including former Areva president Anne Lauvergeon and former head of Greenpeace France Bruno Rebelle.
The debate was instigated following election promises by French president Francois Hollande to reduce the share of nuclear energy in the mix to about 50% by 2025. Hollande has already decided that two reactors at the Fessenheim nuclear power plant should close early, but Batho has promised that the debate is to be open to all, with no opinions declared out of bounds. The government intends to introduce an energy transition bill by the end of the first half of 2013.
Researched and written
by World Nuclear News