B2.10.2.3 Energy Act 2010


On 8 April 2010, the Energy Bill received Royal Assent becoming Energy Act 2010. It implements some of the key measures required to deliver DECC’s low carbon agenda.

The Act includes provisions on:


  • Carbon capture and storage (CCS)
    • Introduces a new CCS incentive to support the construction of four commercial-scale CCS demonstration projects in the UK and the retrofit of additional CCS capacity to these projects should it be required at a future point.
    • Requires the Government to prepare regular reports on the progress made on the decarbonisation of electricity generation in Britain and the development and use of CCS.
  • Introducing mandatory social price support
    • Tackles fuel poverty by lowering the energy bills of more of the most vulnerable consumers and giving greater guidance on the types of households eligible for support. These measures will be funded by requiring energy companies to make available at least £300 million per annum by 2013-14 on social support.
  • Fairness of energy markets
    • Makes it clear Ofgem, in relation to its principal objective of protecting the interests of existing and future consumers, must:
      • Include the reduction of carbon emissions and delivery of secure energy supplies in its assessment of the interests of consumers
      • Step in proactively to protect the consumer interest as well as consider longer-term actions to promote competition.
    • Gives Ofgem additional powers, through the insertion of a market power licence condition in the licences of electricity generation companies, to prevent companies exploiting market power that may arise as a result of constrained capacity in the electricity transmission system.
    • Extends the time limit within which Ofgem can impose financial penalties for breaches of licence conditions from 12 months to five years.
    • Allows the Government to set the period within which energy companies must inform customers of changes to their gas and electricity tariffs.
    • Enables the Secretary of State to address certain types of cross-subsidies between gas and electricity supply businesses should they impact unfairly on consumers.