National Grid, the Low Carbon Contracts Company and the Electricity Settlements Company have now got the powers to implement the reforms, which includes the Capacity Market and the Contracts for Difference (CfDs).
The first auction for the Capacity Market, which is expected to ensure the lights don’t go out at peak electricity demand, will be held in December 2014 for the winter of 2018/19.
The first allocation for CfDs, which supports renewable energy projects, is scheduled to take place in autumn 2014.
The proposals are expected to attract £100bn of new investment over the next five years in the UK’s energy sector with the potential to create around 250,000 jobs in low carbon electricity.
The Department of Energy and Climate Change (DECC) said this is a major milestone that ensures investors have the certainty they need under the new system.
DECC claims that EMR proposals will help reduce household electricity bills by 6% per year compared to the current emission reduction policies.
The government took powers to implement the reforms via the Energy Act 2013, which became law in December last year.
