Her Majesty The Queen has delivered her annual speech at the state opening of Parliament, setting out plans for her Government over the next 12 months. As part of her speech, the Queen announced that Government will propose reforms to the electricity market as well as introduce legislation designed to establish the Green Investment Bank.

“My Government will propose reform of the electricity market to deliver secure, clean and affordable electricity and ensure prices are fair”, the Queen said.

The Energy Bill aims to reform the electricity market to enable large-scale investment in low-carbon generation capacity in the UK and deliver security of supply, in a cost-effective way. The nation is set to invest £110 billion in revamping the UK’s electricity generation infrastructure as part of the proposed reforms.

Commentating on the forthcoming Energy Bill, a Department of Energy and Climate Change spokeswoman said: “This is crucial legislation. The Energy Bill would reform the electricity market to keep the lights on and emissions down in a more cost-effective way, while reaping the economic benefits. 

“It is designed to provide investors with long-term certainty and incentives to invest in low-carbon. We will shortly publish a draft Bill for pre-legislative scrutiny, to enable swift passage of well considered legislation.

“We are publishing the Bill in draft in order to speed up its passage through Parliament and to enable pre-legislative scrutiny which will help make the legislation more robust. This will not delay the date at which the reforms are introduced, and making it available for pre-legislative scrutiny has been welcomed by industry and the opposition.

“We anticipate legislation reaching the statute book by 2013 so that the first low-carbon projects can be supported (as we originally envisaged) in 2014.”

Responding to the Queen’s speech, Gaynor Hartnell, Chief Executive of the REA, said: “We look forward to seeing the details of the Energy Bill.  This is of immense importance to project developers in renewables, as the measures it puts in place will eventually replace the Renewables Obligation. Many of the projects in development now are working to a timescale that takes them into the new regime, and they need to know the detail as soon as possible.

Hartnell continued: “The new arrangements aim to deliver a stable price for renewable electricity generators, irrespective of what happens to electricity prices. If all works as intended, it should make project development less risky and means that the public pays no more than it needs to for green power.”

National Grid Executive Director, UK, Nick Winser, also welcomed the news, saying: “The generation mix is changing and we need to encourage effective investment in the energy industry to keep costs down for consumers. There is a lot of work to do to ensure we are ready to deliver these mechanisms and we remain committed to playing our part and working closely with DECC, the energy industry and other stakeholders to ensure they are delivered on time.”

Simon Harrison of the Institution of Engineering and Technology warned that a great deal of care is needed in the final design of the Energy Bill, stating: “Given E.On and RWE’s planned disinvestment in Horizon there is even more need to judge nuclear support carefully so that the interests of consumers and nuclear project developers are properly balanced. However, there does need to be sufficient clarity soon to move gas and renewables build forward quickly.”

Responding to the inclusion of an Electricity Market Reform Bill in the Queen's speech, Friends of the Earth's Executive Director Andy Atkins said: “The Prime Minister must resist pressure from fringe elements within his party to 'lurch to the right' on energy – 85 per cent of the public back moves to invest in clean British energy from the sun, sea and wind.”

The Queen also confirmed plans to introduce legislation to establish the Green Investment Bank (GIB). Last March Edinburgh and London were announced as the chosen locations for the GIB. The announcement marks Government’s intention to lay down the necessary legislative and legal framework to allow the bank to become fully operational.

Atkins concluded: “The Prime Minister must honour his pledge to lead 'the greenest Government ever' and seize this once-in-a-generation opportunity to make our power system cleaner, more affordable and less reliant on increasingly imported fossil fuels.”