- February 4, 2016
- Posted by: Catalyst
- Category: Business Energy News
The government’s Energy Bill has been approved in its first key vote in the Commons, and its provisions will now be closely scrutinised by MPs.
The bill, which has already been approved in the House of Lords, has two key components: it will establish a new regulator, the Oil and Gas Authority (OGA), for the North Sea industry; and will close the Renewables Obligation, a green subsidy scheme, to new onshore wind projects from April this year.
Opposition parties want to introduce changes to the bill, and have proposed a number of amendments that MPs will now debate. The Labour Party has suggested that the government should be required to report, within six months of the bill coming into law, on how its cuts to subsidies for onshore wind will impact on the UK’s progress towards renewables targets.
The party also believes that the OGA should look at the potential to reuse defunct North Sea infrastructure for carbon capture and storage (CCS) technology.
Meanwhile, the Scottish National Party has tabled amendments that would require the government to produce a new strategy for CCS development. It also wants to force the government to hold auctions for renewables subsidy contracts on an annual basis, for as long as the carbon intensity of UK electricity is above a certain threshold.
A new emissions plan
Speaking during the debate on the bill on 18 January, energy and climate change secretary Amber Rudd announced that the government would introduce a new emissions reduction plan by the end of the year. This will focus on energy efficiency, and decarbonising heating, transportation and the industrial sector. She said the plan would be “long term” and use “new thinking” to address these areas.
Confidence for industry
Concerns have been raised that UK climate policies are undermining the competitiveness of its firms on the international stage. But Rudd said the Paris Agreement meant the UK could be confident that all its trading partners were taking action, and so UK firms would not be disadvantaged by new domestic policies.
The two core components of the bill encapsulate the focus of the government’s energy policy: reducing costs by cutting renewables subsidies, while bolstering energy security by encouraging domestic oil and gas production.