Page last updated at 11:53 GMT, Wednesday, 18 November 2009

Bill set to boost Ofgem's powers

Gas flame
The Energy Bill aims to tackle fuel poverty

The Queen's Speech has outlined an Energy Bill, which is expected to give the regulator Ofgem more power to intervene on behalf of consumers.

The intention is to provide more support for energy consumers and to tackle fuel poverty.

The bill also introduces a financial incentive for carbon capture and storage (CCS) which stops greenhouse gases from reaching the atmosphere.

In CCS, CO2 is captured from a power station and stored deep underground.

The bill will require energy firms to provide support - such as rebates - for poorer consumers, with Ofgem having the duty to "proactively" protect them.

Will provide social price support, such as in the form of rebates
Ofgem must include emissions cuts and energy security in its assessment of consumer interests
Ofgem must tep in "proactively" to protect consumers and consider action to promote competition
Strengthens the deterrent nature of Ofgem's powers by extending limit for imposing fines
Carbon capture and storage incentive to support four commercial-scale projects
Provide funding to retro-fit CCS projects to full capcity if required

The bill will introduce legislation to support CCS, demonstrating the technology at a commercial scale.

It follows confirmation in April's Budget that there would be a new funding mechanism for at least two - and up to four - "demonstration" CCS projects.

Earlier this year, the government gave the go-ahead for a new generation of coal-fired power plants - but only if they could prove they can reduce their emissions.

CCS is one way to cut the pollution. But even if power plants are fitted with technology to trap and store CO2 emissions underground, they would still release more carbon than they stored.

The CCS incentive could provide funding to retro-fit such projects to boost them to full capacity, if that is required in future.

The announcement also comes against a backdrop of mixed messages on the chances of a new deal at next month's UN climate summit.

The Energy Bill follows on from the government's Low Carbon Transition Plan, which outlined actions needed to cut emissions by 34% on 1990 levels by 2020. This would be a stepping stone to achieving a reduction of at least 80% by 2050.

But a recent analysis by the Institution of Mechanical Engineers described the 2050 target as "unachievable". The organisation said there was not enough time or capacity to build the wind turbines and extra nuclear power stations required.


But being at the forefront of global efforts to develop CCS technology would also provide opportunities for British industry, according to the government.

A Flood and Water Management Bill was also announced. The bill is intended to boost protection for homes, communities and businesses at risk from extreme weather as a result of climate change.

It will also improve the management and protection of water supplies.

The bill is intended to safeguard community groups from "unaffordable rises in their bills for water drainage" and will aim to boost the safety of those living close to reservoirs.

Responsibilities for managing flood risks will also be clearly defined; local authorities will be required to take responsibility for surface water flooding - the first time this will be set down in law.

The Energy Bill applies to England, Wales and Scotland; the Flood and Water Management Bill applies to England and Wales.

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