Overview

The Energy Act 2010 is a UK law addressing carbon capture and storage (CCS), fuel poverty, and the regulation of gas and electricity markets. It introduces schemes to fund CCS projects, alleviate fuel poverty, and ensure fair energy pricing for disadvantaged customers, while also modifying the regulatory framework for gas and electricity suppliers.

Description

The Act is divided into four parts. Part 1 focuses on CCS, providing financial assistance for demonstration projects and subsequent wider use through government schemes and a possible electricity levy. It also mandates regular reports on decarbonisation progress.

Part 2 establishes schemes to reduce fuel poverty by requiring licensed gas and electricity suppliers to provide benefits to vulnerable customers, potentially through direct payments or reduced energy charges. These schemes include reconciliation mechanisms to ensure equitable distribution of costs among suppliers.

Part 3 amends the Gas Act 1986 and Electricity Act 1989 to emphasize the interests of consumers (including reducing greenhouse gas emissions and securing supply), and introduces modifications to address potential exploitation within electricity markets. It also includes provisions about notifying customers of unilateral changes in domestic energy contracts and adjusting energy charges to help disadvantaged customers.

Part 4 contains the Act's final provisions, covering the implementation and enforcement of its different sections, parliamentary procedure for certain modifications, and financial provisions.

Government Spending

The Act doesn't specify exact figures, but it authorises significant government spending on financial assistance for CCS demonstration projects and schemes to reduce fuel poverty. The exact cost will depend on the scale and implementation of these schemes.

Groups Affected

• Energy companies: These will be affected by the regulations governing CCS, fuel poverty schemes, and market regulation; potentially facing increased costs or altered operational requirements.
• Consumers: Vulnerable customers will benefit from fuel poverty schemes, while all consumers might be affected by electricity levies for CCS or modifications in electricity trading and transmission arrangements.
• Government: The government will incur costs associated with the financial assistance programs and regulatory oversight of the new schemes.
• Public bodies: The Gas and Electricity Markets Authority (GEMA) has a significant role in implementing and enforcing many aspects of the Act.

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