Energy Act 2013—snapshot
Energy Act 2013—snapshot

The following Energy practice note provides comprehensive and up to date legal information covering:

  • Energy Act 2013—snapshot
  • Background
  • The Energy Act—key energy market reform features
  • Contracts for Difference
  • Investment contracts
  • Renewables Obligation—transitional arrangements
  • Capacity Market
  • Emissions Performance Standard

Background

At the time the Energy Act 2013 came into force, and to an extent to this day, the UK faced real and serious challenges in relation to its electricity infrastructure. These included:

  1. developing the low carbon generation capabilities necessary to meet its net zero carbon targets (as prescribed under the Climate Change Act 2008, as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019, SI 2019/1056)

  2. replacing existing power generation assets that are reaching the end of their lives

  3. upgrading grid infrastructure to meet the demands put upon it by the existence of a greater proportion of intermittent and inflexible generation forms (such as wind and nuclear respectively, as distinct from conventional and nimble forms of power generation such as coal-fired turbines) and a growing population, and

  4. achieving improvements in energy efficiency, particularly in relation to aged and inefficient building stock, to try to curtail energy demand

The overall investment needed in power infrastructure has been estimated at £110bn by 2020.

In order to achieve these objectives, particularly on the supply side of the market, the government set out its proposals for electricity market reform (EMR) in the draft Energy Bill (2012), which received Royal Assent as the Energy Act 2013 on 18 December 2013.

The key EMR mechanisms set out in the Energy Act 2013 (EA 2013) are:

  1. Contracts for Difference (CfD)—long-term instruments to provide

Popular documents