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Tim Dodd

12.12.2013 | 12:30pm
ScienceThe life and times of the UK’s energy bill
SCIENCE | December 12. 2013. 12:30
The life and times of the UK’s energy bill

Parliament finally passed the energy bill yesterday, bringing to a close two years of politicking over the future of the UK’s energy and climate policy. It’s not always been an easy ride.

Let us take you back to the dim and distant pastâ?¦

December 2010 – Consultation

In December 2010, Energy Secretary Ed Davey’s predecessor Chris Huhne launched a consultation on the government’s proposed electricity market reform (EMR) package.

A year later, this led to a White Paper on Electricity Market Reform (EMR) in December 2011, which in turn became the draft Energy Bill.

The bill aimed to provide a framework for investing in the UK’s ageing energy infrastructure, while nudging it along a low carbon path in line with the goals of the Climate Change Act.

May 2012 – Draft published

The energy secretary, Ed Davey, published a draft bill to much fanfare.

The immediate response wasn’t all that positive. The media focused on Davey’s “admission” that household bills would go up (in the short term) as a result of the changes – with figures suggested ranging from £100 to £1000 per year.

The House of Commons’ energy and climate change (ECC) committee was also concerned the draft bill overlooked energy efficiency, didn’t provide clear emissions reduction goals, and would open the door to lots of gas generation.

November 2012 – The bill is formally introduced

Ed Davey introduced the bill to Parliament a few months later. The bill was meant to be a “grand bargain” between the Conservatives and Lib Dems, which would deliver affordable, secure, low carbon energy.

The news coverage gave a hint of battles to come, however: Davey refused to be drawn on whether or not power plant emission regulations would be included in the final bill, and papers continued to claim the measures would add £170 to household bills.

December 2012 to May 2013 – MPs scrutinise

Thus began six months of brow-furrowing and bickering in the House of Commons.

One key scuffle was over the inclusion of the so-called decarbonisation target. ECC committee chair, Tim Yeo, put forward an amendment calling for the target be set in line with recommendations from government advisor the Committee on Climate Change – at 50 grams of carbon dioxide per kilowatt hour.

Supporters said the target would have effectively ruled out a ‘dash for gas’ (which the Treasury was reportedly keen on) and created certainty for low carbon energy investors.

Critics said it was one target too many, however, which could have harmed the UK’s economic competitiveness.

In the end, a compromise was struck – the secretary of state would be allowed to set a decarbonisation target, but wouldn’t do so until after 2016 – and the amendment was defeated.

That wasn’t the only squabble that risked delaying the bill. Opposition MPs also pushed the government to extend emissions regulations for new coal plants – the ’emissions performance standard’ – to existing old coal plants. They were concerned the ‘coal loophole’ would allow the most polluting fossil fuel to continue to make a significant contribution to the UK’s energy mix for decades to come.

But the government wasn’t interested, and the amendment to extend the EPS was also defeated.

And with that, the bill was unceremoniously flung across the lobby into the House of Lords.

June to November 2013 – Lords scrutinise

Undeterred by the Commons’ lack of enthusiasm for more stringent decarbonising measures, the Lords promptly set about trying to reinstate some of the things MPs had spent six months rejecting.

The Lords, led by crossbencher Lord Oxburgh, decided to have another bash at forcing the government to commit to a low carbon path. But after months of back and forth, a decarbonisation target amendment was again narrowly defeated at the end of October – basically spelling the end for the decarbonisation target.

There was speculation the government would accept an emissions performance standard amendment, which would force old coal plants to lower their emissions, so long as Lords kept the decarbonisation target out. And so Liberal Democrats – led by Lord Teverson – rebelled against the government’s original decision, and the Lords voted to keep an emissions performance standard in the bill.

With that addendum the draft bill waddled its way back to Davey and colleagues in the Commons like a rapidly-fattening Christmas goose.

December 4th 2013 – Commons considers Lords amendments

MPs considered the Lords’ changes and decided that, on the whole, they seemed like a good thing – accepting around 120 amendments.

But there was a snag: the government had won the battle over the decarbonisation target, and Ed Davey wanted to complete the set by striking down the old coal amendment, too. MPs retraced their steps through the voting halls, and once again voted against the change.

With MPs and Lords not seeing eye to eye, there was only one way to settle the dispute: ping pong. (No, that’s really what it’s called).

December 11th 2013 – Just ‘ping’, actually

Not as exciting as it sounds, it turns out. The MPs’ rejection meant Lords once again had to consider (PING) whether or not to try and force the government to accept the amendment (PONG).

Lords Teverson, Oxburgh and shadow spokesperson for energy and climate change, Baroness Worthington, offered a solid defence of a compromise amendment, which would extend the EPS, but not until 2025.

Nonetheless, Lords chose dignified retreat over a prolonged and sweaty battle. With the whips out in force, the Lords voted to reject the amendment by 262 votes to 215.

Waiting for her Majesty

Now all that’s left if for her Royal highness to pluck a feather from the nearest swan, make her mark, and hey-presto – the energy bill will become law.

Here are the main things contained in the bill, and links to where we’ve discussed them in more detail:

  • Contracts for Difference: The new way to subsidise low carbon electricity generation
  • Capacity market: Allowing generators to bid to help secure the UK’s energy supply
  • Limited energy tariffs: Energy companies will only be able to offer a small range of tariffs to households, in a bid to simplify the market
  • New fuel poverty target: Opens the door for a new fuel poverty target to be set in another law
  • Emissions performance standard: Requiring all new power plants to limit emissions

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