Committee slams draft Energy Bill
The government's draft Energy Bill has been slammed for being "unworkable" by the energy select committee.
The committee also warned that it will help the 'Big Six' energy firms to dominate the market and that the Treasury's lack of goals and failure to support new investment contracts is giving investors cold feet.
The committee called for the government to "rethink its plans urgently so that the investment that is needed to replace the UK's ageing power stations, cut carbon emissions and maintain energy security can be delivered".
Recommendations were made by the committee for the government to continue with the expected plan that would see the AAA-rating used to guarantee contracts and low-carbon electricity costs. This would decrease the risk for investors in capital-intensive plans such as nuclear reactors, wind farms and other sustainable products.
However, the Treasury has said that it does not intend to make the guarantees, but for a variety of energy firms to take on the burden of risk.
The select committee believes that this would create an "unacceptable" amount of risk for construction companies and would be complicated and perhaps legally unenforceable.
According to the committee it would also limit the amount of contracts - hampering smaller and community-based projects - while adding to the uncertainty over which will be getting support.
Copyright Press Association 2012
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