The UK Government’s radical reforms to attract investment in low carbon energy have been passed into law.
That means its delivery partners for the electricity market – the National Grid, the Low Carbon Contracts Company and the Electricity Settlements Company – have got the powers to implement the reforms, which includes the Capacity Market and the Contracts for Difference (CfDs).
The news comes after the two schemes were given the go-ahead by the European Commission last month.
The first auction for the Capacity Market, which is expected to ensure the lights don’t go out when electricity demand is high, will be held in December this year for the winter of 2018/19.
The allocation for CfDs, which supports renewable energy generation, is to be held in autumn 2014.
“This is a major milestone that ensures investors have the certainty they need under the new system”, DECC said.
Its estimates suggest household electricity bills to be £41 or 6% lower on average every year up to 2030 as a result of the reforms.