Chambers of Commerce Energy Group Update – March 2013

  • Ofgem warns of rising prices and energy shortages
    The outgoing chief executive of Ofgem, Alistair Buchanan, has warned that the UK faces higher energy bills over the coming years due to shortage of energy supplies. In a major speech he said that a fall in the UK's power production capacity is likely to lead to more energy imports and he predicts power station closures could mean a 10% fall in capacity by April alone. He said the UK needs more gas supplies and an improvement in energy efficiency to fill the shortfall.
     
  • Prime Minister hails clean energy on Indian trade mission
    The prime minister has underlined his support for green technologies during a major trade trip to India. He was accompanied by several green companies and climate change minister Greg Barker on the trip. At his first stop, the Unilever office in Mumbai, he touted the benefits of clean energy as a key to UK economic growth.
     
  • Nuclear power
    According to reports in the Guardian the government is proposing to sign contracts guaranteeing subsidies for new nuclear for up to 40 years. The paper said that ministers are proposing the timeline in order to keep the guaranteed wholesale cost of each unit of energy below the politically crucial figure of £100 per megawatt hour. DECC said in a statement that: "No commitment has been made on commercial terms or a strike price.”
     
  • Energy Bill decarbonisation amendment tabled
    Conservative MP Tim Yeo and Labour's Barry Gardiner have tabled an amendment to the Energy Bill that would require the government to introduce a decarbonisation target for the power sector by April next year, paving the way for a potential Commons rebellion. Yeo, who chairs the Energy and Climate Change Select Committee, and Gardiner, who serves on the Committee and also acts as Labour leader Ed Miliband's Climate Change Envoy, put forward the amendment after the Bill Committee Stage.
     
  • EU-wide offshore oil and gas law
    The EU proposed its first law to regulate safety in offshore oil and gas drilling across the 27-member bloc and prevent any repeat of BP's Gulf of Mexico spill. The law still needs final endorsement from member states and the European Parliament. Politicians from Britain were among the first to welcome it. As they argue British standards of safety are already excellent and the new law would oblige others to follow suit. Britain was among those who campaigned for the law to be a directive rather than an EU regulation.
     
  • Marine power
    Two British companies have today been awarded a share of £20 million to help drive forward growth in the UK’s marine energy industry. MeyGen Ltd and Sea Generation Wales Ltd have both won funding under the government’s Marine Energy Array Demonstrator scheme (MEAD). MEAD was launched in April last year, to support the development and testing of pre-commercial marine devices in array formations out at sea.

Upcoming developments

  • Energy Bill completes Commons Stage and goes to the Lords
  • New strategies on nuclear, oil and gas and offshore renewables to be published
  • Carbon Floor Price to be introduced in April
  • Decision on next stage of UK and Ireland wind trading
  • Capacity market design proposals due to be published in the spring
  • Strike Price proposals due to be published in the summer
  • BIS Publish Industrial Strategies (Offshore Wind, Nuclear, and Oil & Gas)
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