Parsing the report on the draft Energy Bill
Aug 16, 2012
Bishop Hill in Energy: grid, House of Lords

The House of Lords informal working group on the draft Energy Bill has reported. I have made some excerpts from their paper, together with my take on what is meant.

[1] We understand that the Government’s long term aim is that of a competitive market for electricity but we have serious doubts that it can be reached by the mechanisms proposed in the Draft Bill.

Translation: This is a shambles.

[2]...if these proposals are implemented, the process for awarding contracts to supply electricity will, for much of the time between now and the end of the decade, be largely at ministerial discretion.

Translation: You guys will be coining it though.

[3] The Government would have to estimate reasonable prices (“Strike Prices”) for electricity generated by each particular means (e.g. gas with or without CCS, off‐shore wind, nuclear etc.) for the duration the contract – presumably between fifteen and twenty five years. We do not see how the Government can do this in any credible way, even with the assistance of the System Operator.

Translation: Even though you couldn't run a whelk stall.

[4] Much of the risk arising from forward pricing of electricity generation by ministerial judgement could fall on the consumer and little or none on the generators or the supply companies.

Translation: Moreover, you are going to knacker your constituents' lives.

[5] We were somewhat puzzled by the DECC projections of future demand and were concerned that the most recent expectations of population growth were not incorporated in their forecasts.

Translation: Did you have to fiddle the figures quite so obviously?

[6] There is no guaranteed demand for renewable electricity and independent generators are unlikely to be able to conclude Power Purchase Agreements for their electricity at satisfactory rates.

Translation: Why are you even bothering with all this?

[7] We are also concerned that, given the very long lead times and the need to bring in significant amounts of new low carbon generating capacity before 2020, the shape of the generating system in the UK could well be set for several decades under a system that was both opaque and devoid of any serious external scrutiny.

Translation: Oh I see.

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