The legislation affected would have given powers for the government’s electricity market reforms but will now not be on the parliamentary agenda until 2013 at the earliest. The Department of Energy and Climate Change has not yet confirmed the decision, however.
Gaynor Hartnell, REA’s chief executive, said: “Industry had major concerns about the detail of EMR. It was intended to be an all-encompassing approach, covering nuclear, renewables and CCS. Clearly it has been difficult to come up with something that works for all these low carbon technologies. The Government must have felt uncomfortable that several of the main players were withdrawing from nuclear, and that the European Commission had expressed concern about nuclear receiving State Aid support.
“This delay gives Government the opportunity to reconsider its plans for renewables and give them the priority they deserve. They can deliver early CO2 savings in the transition to a low carbon economy and their build out should create 400,000 jobs by 2020.”
The proposed reforms to the energy market include new incentives for renewable energy, a carbon floor price to give investor certainty in lower carbon investment, an emissions performance standard which will ban the construction of new coal-fired power stations without carbon capture and storage (CSS) plus a carbon mechanism which should encourage investment in back up power.