By Marcus Leach
Corin Taylor, Senior Economic Adviser at the Institute of Directors, has said that the government's new Energy Bill is welcome, but there are still certain unanswered questions.
Essential legislation to power low-carbon economic growth, to protect consumers, and to keep the lights on was introduced to Parliament by Edward Davey today (Thursday).
However, despite welcoming the bill, Taylor said that we will need to see how effective it is once it is up and running.
“The Bill starts to provide some certainty in an area where the absence of a firm policy has been harming energy investment prospects in the UK, but questions still remain," he said.
"Only when it is up and running will we know whether the Contracts for Difference framework will succeed in lowering the cost of capital. Setting the strike prices at the right levels will be crucial to ensuring that businesses and households don’t overpay for the new nuclear and renewables that the country needs.”
“Exempting energy intensive industries from the extra costs of low carbon energy is good news, but it is also an implicit confession that government policies are driving businesses’ energy bills up to damagingly high levels. Other industries will still bear a heavy burden just to keep the lights on. “
“Leaving the door open for gas to be a major part of the energy mix is a wise move, particularly with huge potential offered by British shale gas reserves. Shale gas is set to become a sizeable industry in the UK, which will help to create jobs and reduce our reliance on costly foreign imports. While the UK and other EU countries have moved cautiously, the US is enjoying a manufacturing resurgence with shale gas contributing to some of the lowest energy prices in the world.”
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