The UK's electricity market is evolving, with far-reaching implications for generators and investors in the renewables sector. As the draft Energy Bill progresses through Parliament this year, further detail is expected in a number of key areas which will prove essential in establishing investor confidence in this market. We set out some key questions and considerations for generators and investors and identify the issues that must be resolved to reduce uncertainty and attract investment.
On 18 June 2013, the Energy Bill received its second reading in the House of Lords, including the measures which the UK Government wish to introduce to encourage the required level of investment in renewable energy generation (Electricity Market Reform or "EMR").
EMR is required, according to the Government, to address the significant energy generation investment required as existing generating assets are shut down. The Government estimates that £100 billion of investment in new generating capacity and transmission and distribution assets is required by the year 2020. By any measure, that is a massive challenge and one which generators and investors involved in (or looking to become involved in) renewable energy projects are watching closely to see how the Government will further foster and encourage this level of investment.
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References in this note to sections are generally to the relevant provision in the draft Energy Bill, unless otherwise specified.
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