The government’s much-vaunted efforts to ‘keep the lights’ on has been the subject of considerable debate in recent months.
Mr Davey said the the bill, expected to received Royal Assent, will “attract investment to bring about a once in a generation transformation of our electricity market, moving from predominantly a fossil-fuel to a diverse low-carbon generation mix.
“This is the culmination of two years’ work in designing a new market-based approach that will deliver certainty for investors and fairness for consumers.”
He reiterated the need for £110 billion of investment to upgrade the UK’s energy infrastructure.
This figure accounts for nearly half of the total amount required for all UK infrastructure, he said.
Renewables, nuclear, gas and carbon capture and storage will be supported by the bill.
Aligned with the government’s Annual Energy Statement, also published today, it is claimed that average household energy bills will be 7 per cent lower in 2020 than would otherwise be the case without the measures announced earlier.
Measures included in the Energy Bill:
Contracts for Difference to encourage investment in low-carbon electricity generation, with the government acting as counterparty.
The introduction of a Capacity Market, allowing capacity auctions to take place in 2014 to cover the winter of 2018/19.
A Final Investment Decision enabling process for early projects, guarding against delays and encouraging investment.
An Emissions Performance Standard to curb the most polluting fossil fuel power stations.
Investors can choose between the new system and the existing Renewables Obligation.
Proposals to enable the sale of the Government Pipeline and Storage System.
Closer alignment between the government and Ofgem, with the latter receiving new powers to enable it to provide compensation to consumers.