electricity market reform
Electricity Market Reform (EMR) is a major energy policy review which started in 2010 under the Coalition government; the proposals were made with the aim to deliver directly on commitments made in the Coalition Agreement .
The four original components under EMR were:
- Feed-in Tariff Contracts for Difference (FiT CfDs)
- Capacity Market (CM)
- Emissions Performance standard (EPS)
- Carbon Price Support (CPS)
The rationale of the reform is that it is required to attract the necessary investment (estimated at over £110 billion) to replace the generating capacity which is shutting down, meet the projected increase in demand, and to decarbonise the sector at a lower cost than using existing policies.
The CPS is often referred to as the Carbon Tax and was implemented in April 2013. The Energy Bill puts in place the legislative framework necessary for the remaining parts of the original Electricity Market Reform proposals along with a few other related measures such as investment contracts (can be thought of as early CfDs) and powers to implement other changes in the energy industry (such as formalising nuclear regulation and giving the Secretary of State the power to set a 2030 decarbonisation target).
The Secretary of State for Energy and Climate Change confirmed the Introduction of the Energy Bill to the House of Commons on 29th November 2012. It has to be approved by Parliament before implementation of the measures which is expected to start in 2014.
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latest policy updates
To keep up to date on the latest Electricity Market Reform news and policy updates visit our EMR news archive.> See the policy updates archive on EMR