The draft Energy Bill 2012

On the 9 May 2012 the Queen’s Speech announced that “My Government will propose reform of the electricity market to deliver secure, clean and affordable electricity and ensure prices are fair”.

This will be done through the latest in a line of energy bills. This note outlines the bill’s likely main provisions and the background to these.

On 22 May 2012 the Department for Energy and Climate Change published a draft energy bill, for pre-legislative scrutiny alongside a series of technical updates, aide-memoires and impact assessments. The Energy and Climate Change Select Committee will examine the bill with a view to reporting before summer recess (17 July 2012).

Initial press coverage has focussed on support for nuclear generation, which the bill proposes through ‘contracts for difference’, along with other low-carbon generation. As with other such support mechanisms, these costs will be passed onto consumers via their bills. Some commentators have speculated that wider ‘electricity market reform’ is unlikely to engage the public. But get this, and related issues, right, one commentator argues, and electricity market reform could lay the groundwork for a low carbon economy.