Ed Davey (Liberal Democrat)

At the heart of our Electricity Market Reform (EMR) measures are feed-in-tariffs with Contracts for Difference (CFDs), long-term instruments which will provide stable and predictable incentives for companies to invest in low-carbon generation. CFDs are more affordable than alternative incentives and will mean a better deal for consumers. Through the work on Final Investment Decisions (FID) Enabling we are committed to working with developers to enable some of this investment to come forward in advance of the CFD regime coming into force, and the Bill contains measures to support this process. This will be complemented by a capacity market that will, if required, provide security of electricity supply by ensuring sufficient reliable capacity is available. Measures relating to conflicts of interest and contingency arrangements will ensure that the system operator which will deliver these schemes is appropriate. Renewables transitional measures will ensure that existing investments under the renewables obligation remain stable. Finally, an Emissions Performance Standard (EPS) will limit carbon dioxide emissions from the most polluting fossil fuel power stations by setting appropriate standards for all new fossil fuel powered generation. Taken as a whole, EMR will enable large-scale investment in low-carbon generation capacity in the UK and deliver security of supply, in a cost-effective way.

I am confident that measures contained in this Energy Bill will enable us to keep the lights on, bills down and air clean. I am pleased to commend it to the House today for PLS and will look forward to the publication of the Energy and Climate Change Select Committee’s report.

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