29 Nov 12

EDF Energy Responds to Energy Bill

The publication of the Energy Bill marks a “defining moment” for UK energy policy and gives consumers and investors more clarity around the massive investment needed to give the country secure, low carbon energy for the future.

EDF Energy was looking to see a number of key measures in the Bill.

• A robust legal framework to enable durable Contracts for Difference, proof against future political change, an essential step towards giving investors the certainty they need to build new capacity and to give the UK the right energy mix for the future

• Continuing momentum in the process to enable progress towards a final investment decision

• A transparent process so that any strike price can be scrutinised and clearly seen as a balanced and fair deal for investors and consumers

Our first examination of the detail of the Bill makes us believe that these objectives have been met and gives us confidence that the Bill represents a significant step forward.

• We believe that the Bill can provide the legal certainty required for robust and durable Contracts for Differences, with a single Government-owned counterparty which will offer stability and value for customers, as well as long term assurance for investors

• The publication of the Bill and the expectation of a second reading before Christmas demonstrates real momentum. Further work remains to be done to finalise transitional arrangements, an agreed strike price and detailed terms

• We note that that the strike prices for Investment Contracts will be made public. We fully support this in the interests of ensuring transparency and believe it is vital to reach a fair and balanced agreement. We note that the Secretary of State will publish the contract together with summaries of external advice and the assessments of value for money and fairness which follow from extensive internal and external scrutiny

• We also welcome confirmation that there will be a Capacity Mechanism with an intention to run the first auction in 2014, which will help maintain security of supply

EDF Energy plans to build two new nuclear reactors in Somerset. Our objective is to have all the components in place around the end of the year to allow a final investment decision at the earliest possible date.

We look forward to looking at the detail of the Bill and working with the Government and stakeholders to deliver these reforms in a way that offers the best value for customers.

EDF Energy Chief Executive Vincent de Rivaz said:

“The publication of the Bill is a defining moment for UK energy policy and demonstrates a real commitment to create the right conditions to give the UK a secure, low carbon energy supply for the future.

“This will give further clarity for investors around the large investments needed, and will provide a fair and balanced deal for consumers in a way which is open and transparent. I hope that the momentum behind energy reform will continue.”