The UK government’s Electricity Market Reform programme – one of the flagship policies of the Energy Act 2013 – is going ahead as planned for implementation later this year.Energy Minister Greg Barker told a meeting of bankers in London that “after several years of planning for EMR, we’re bang on track for implementation’.
The two main components of EMR are the Contracts for Difference (CfD) to support low carbon generation, and the Capacity Market to ensure security of supply.
It’s the first of these which matters most to the renewables sector. Contracts for Difference are in effect a type of guaranteed feed-in tariff, designed to provide stable and predictable incentives for companies to invest in low-carbon electricity generation. It removes wholesale electricity price risk.
Barker added: “Our Electricity Market Reform programme is a radical new market design which retains a liberal approach while addressing market failures. Our reforms will ensure that the UK remains a leading destination for investment in low carbon electricity right across the technology landscape, not just renewables.
“The UK has the largest offshore wind market on the planet. And according to E&Y, we continue to be the most attractive destination in the world for offshore wind investment. By 2020 we could see 8 to 15GW of installed offshore wind capacity which could support up to 35,000 jobs.”
The minister also noted that the Green Investment Bank, which is partly based in Edinburgh, has now invested well over £600 million in five offshore wind farms and a total of £1.3bn has been mobilised for further investment.