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May 18, 2012

UK Highlights – Queen’s Speech, Barrages and Butterflies


The Green Investment Bank, electricity market reform and proposals for the water industry all made it into the Queen’s Speech on May 9, and environmental groups and business leaders are pressing for further details on Government plans.   A proposed tidal barrage across the Severn estuary, the Government’s commitment to green growth and the UK’s springtime weather has also made the headlines.

Electricity Market Reform.  The Queen’s Speech on May 9, 2012, confirmed there will be an Energy Bill to take forward the Electricity Market Reform White Paper (July 2011).  The Queen said “My Government will propose reform of the electricity market to deliver secure, clean and affordable electricity and ensure prices are fair.”   The Cabinet Office published a briefing paper (pdf) to accompany the Queen’s Speech, setting out the Government’s intentions.  The proposed Energy legislation will include: a system of low-carbon generation revenue support (feed-in tariffs with Contracts for Difference); an Emissions Performance Standard; a capacity mechanism to ensure security of supply; the creation of the Office for Nuclear Regulation; and a Strategy and Policy Statement for the energy sector in Great Britain.  DECC is expected to publish a draft Bill shortly, and hopes the Energy Bill will reach the statute books by 2013.

 Lib Dems voice concern over nuclear “subsidies”.  One of the controversial elements of the proposed legislation is the expected “Contracts for Difference,” designed to provide price certainty of revenues for low carbon electricity generation and encourage investment in clean energy.  The Coalition agreement pledged there would be no public subsidy for new nuclear power stations in the UK, however, some Lib Dems warn that by including new nuclear in the “Contracts for Difference” nuclear power will effectively be subsidized through electricity bills.   Lib Dem Energy Secretary Edward Davey MP insists “nuclear will not receive a higher price than comparable generation technologies whether they be renewables or indeed gas generation once its emissions have been abated by carbon capture and storage. There will be no public subsidy of nuclear generation.”  Environmentalists and businesses leaders have called for more policy detail.

Draft Water Bill.  The Queen’s Speech also announced a Draft Water Bill, to reform the water industry in England and Wales.  The Government plans will take forward the Water White Paper to help business and public sector bodies obtain more competitive prices and improve their efficiency.  The Bill aims to implement water and sewerage market reforms, extend the scope of environmental permitting regulations and encourage water companies to address future resource challenges and become more responsive to customers.  Green groups are calling for measures to increase the use of water meters to address water shortages.  Shadow Environment Secretary Mary Creagh said Government should “set national standards for social tariffs to help families with rising bills, set tougher targets to reduce water leaks and protect our country’s water supply for the future.”

Green Investment Bank.  The Queen’s Speech confirmed the Government will introduce legislation to establish the Green Investment Bank.   The Enterprise and Regulatory Reform Bill will provide new powers for the Bank to operate, which, the Government plans, will accelerate private sector investment in the transition to a green economy.

In other news, the Committee on Climate Change has called for stronger incentives for local authorities to act on climate change to help meet national targets.  Peter Hain MP has resigned from Labour’s frontbench to campaign for a tidal barrage across the Severn Estuary.  In Prime Minister’s Questions on May 16, David Cameron told Hain he recognized the problems and advantages of a barrage and would “listen to his views.”  In an Aldersgate Group Event on May 16, Environment Secretary Caroline Spelman said she will be calling on the international community at the Rio+20 Earth Summit to commit to green growth.  In a leaked letter seen by The Guardian, Foreign Secretary William Hague also called on cabinet colleagues to take a stronger lead on the green economy

Finally, with “wild” weather in the UK this spring, Butterfly Conservation says some butterfly species are appearing early, while others have been delayed by the deluge of rain.  The Environment Agency has announced that South West England, the Midlands and parts of Yorkshire are no longer in drought due to the recent wet weather, but water restrictions remain in place in parts of East Anglia and the South East.

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