EDF Energy expects progress on draft Energy Bill following select committee report
Following today’s publication of the Energy and Climate Change Select Committee’s pre-legislative scrutiny report on the draft Energy Bill, EDF Energy expects to see further improvements to the draft legislation over the coming months. The draft Bill aims to deliver affordable, secure and low carbon energy for the UK.
EDF Energy recognises what remains to be done to refine the draft Bill and is confident that Government will make good progress over the summer.
The company, which provided written and oral evidence to the Select Committee, strongly supports the need to reform the UK energy market. The proposed reforms enjoy broad industry consensus and will deliver much-needed, stable and sustainable investment in all low carbon generation, including renewables, offering the most competitive cost to customers and revenue stability to investors.
We strongly support the Committee’s desire to ensure that the draft Bill is delivered in good time, with Royal Assent achieved in early 2013. We would like the Bill to be introduced in the autumn and to have completed all Commons stages by the end of the year. This would help to unlock early investment and drive forward economic recovery.
The Select Committee recognises the crucial role of the Contract for Difference (CfD) in supporting all forms of low carbon generation. It is a simple, transparent and proven instrument that delivers stability not subsidy.
We believe it is essential that that Government accepts the Committee’s recommendation to adopt a single counterparty payment model that is legally enforceable and enduring.
We also support the recommendation that the Committee on Climate Change (CCC) is made a statutory consultee to the EMR delivery plan to ensure consistency with the CCC’s pending carbon budgets. This will provide further certainty to investors and accelerate decarbonisation.
EDF Energy believes that the Department for Energy and Climate Change’s current consultation provides a good opportunity to assess and address any concerns over the benefits from CfD arrangements to new entrants and independent generators. CfDs will eliminate significant risks associated with fossil fuel price movements and Renewable Obligation Certificate value fluctuations. We are developing the Navitus Bay offshore wind farm and are confident that the new arrangements will provide a fair level of support for this project and a better deal for consumers.
Independent reports show that nuclear new build can be amongst the lowest cost, reliable and scaleable low carbon technologies. Shaped by discussions with Government over the coming months, the agreed strike price for nuclear will be competitive and delivered in a way that is fair, balanced and transparent. The process has only just started and EDF Energy expects very robust scrutiny of the costs of its new build project from Government and its advisers. We are confident that our project will deliver value for money for customers.
Vincent de Rivaz, EDF Energy’s Chief Executive, said: “Today’s report is an important contribution. It helps to establish the right framework to encourage crucial investment in new nuclear, renewables and other low carbon technology as existing power stations close, and as the UK works towards its carbon reduction targets.
“Investors need confidence that the parliamentary process will deliver a robust policy framework as and when they take critical decisions on their projects. Although there is work to be done, we remain determined to play our full part in realising the opportunities that lie ahead to deliver the right outcome for both customers and shareholders. We continue to move our nuclear new build project forward, ahead of a multi-billion-pound final investment decision to be taken at the end of the year with our partner Centrica.
“I would like to commend the Committee for the way it engaged with these issues and for helping to pave the way ahead.”