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Chris Huhne’s Electricity Market Reforms Delayed

The government’s flagship electricity market reforms (EMR) will not be finalised for more than 12 months, prompting calls for the coalition to fast-track legislation that is regarded as critical to efforts to drive £200bn of energy infrastructure investment by the end of the decade.

Responding to a recent report from the Energy and Climate Change Committee of MPs on Ofgem’s Retail Market Review, the Department of Energy and Climate Change today reiterated its commitment to delivering its EMR package, insisting the reforms will “deliver clean, secure energy at the lowest possible cost”.

However, the response provided no update on the timeline for passing the legislation that will underpin the EMR. The reforms will enable the new subsidy mechanisms for low-carbon energy, introduction of a carbon floor price, changes to the back-up power regime and emissions standard for coal-fired power plants.

According to parliamentary sources, the legislation is likely to feature in the Queen’s Speech next May. As a result, it will not receive the required parliamentary time until the autumn of 2012 and is unlikely to gain Royal Assent until early 2013.

Chairman of the Energy and Climate Change Committee Tim Yeo MP issued a statement voicing his concerns over the apparent delay to the flagship energy legislation.

“Electricity market reform is urgently needed to break up the dominance of the Big Six energy companies and set the right long-term framework to reduce the UK’s dependence on fossil fuels, which are becoming increasingly expensive,” he said.

“I am extremely concerned that the electricity market reform legislation has been delayed until the next session of parliament in the second half of 2012. The government should make this a priority and deliver market reform much quicker.”

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