Electricity market overhaul set out by the Government

The Department of Energy and Climate Change (DECC) published its Electricity Market Reform White Paper on Tuesday 12 July. There were few surprises in it, as it largely resembles the initial proposals set out in December. These include; introducing a carbon floor price of £16/tCO2 in 2013 rising to £30/tCO2 in 2020; contract-for-difference feed-in tariffs to support long-term investment in low-carbon technologies; an emissions performance standard (set at 450g CO2/kWh) so carbon capture and storage capability is fitted to any new coal-fired generators; and a capacity mechanism to promote energy supply security. The Government intends to legislate for the elements of the package in May 2012. Energy and climate change secretary Chris Huhne said the reform was needed to "keep the lights on and bills down", insuring the UK against price shocks and facilitating the required £110bn investment in new generation infrastructure.

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