The new act will provide financial incentive to bring forward four commercial scale demonstration projects on coal-fired power stations and to support the retrofit of additional CCS capacity to those projects if required at a later date.
The new act promises to create a framework to mandate energy companies to provide support to the fuel poor, by giving greater guidance and direction on the types of households eligible for future support and the type of support they should be given.
The act makes it clear that Ofgem must include the reduction of carbon emissions and the delivery of secure energy supplies in their assessment of the interests of consumers, and step in proactively to protect consumers as well as considering longer term actions to promote competition.
In addition, the act gives Ofgem additional powers to tackle market exploitation where companies might take advantage of constraints in the electricity transmission grid.
Other measures include: requiring the government to prepare regular reports on the progress made on the decarbonisation of electricity generation in Britain and the development and use of CCS, extending the time limit from one year to five years within which Ofgem can impose financial penalties on energy suppliers for breaches of licence conditions, and allowing the government to set the period within which energy companies must inform customers of changes to their gas and electricity tariffs.
It also requires enabling action to be taken against unfair cross-subsidy between gas and electricity supply.
