The bill is designed to encourage investment in clean energy generation and ensure security of supply. While the bill is designed to encourage investment in both nuclear and renewables the lack of subsidies for nuclear power may deter investors.

Critics of the proposals say they will result in higher electricity prices and gas prices as investors look for a return on their investments.

As Utility Exchange has reported in the past a number of coal fired power stations are set to close in the near future and old nuclear power plants are set to be shut down so new energy generation is needed to ensure security of supply. New energy generation needs to be low carbon to ensure the UK meets its carbon reduction commitments.

The Energy Secretary, Ed Davey, said “With nuclear capacity and coal capacity coming offline, we need a market structure to keep the lights on. To get investment, we need to give investors certainty that will lower the cost of capital”.

He added “There will be no blank cheque for nuclear – unless they are price competitive, nuclear projects will not go ahead”.

Speaking on the Today programme on BBC Radio4, Dr David Toke, senior lecturer in Energy Policy at Birmingham University, said “nuclear power is basically a dead duck”. He said nuclear power is very uncompetitive even when compared to expensive offshore wind farms. It’s because they are so expensive that it’s difficult to sell them to investors. To encourage anyone to invest in nuclear power would involve very high electricity prices to make their investment worthwhile.

While state subsidies are not allowed in the European Union the offer of guaranteed contracts for energy suppliers are seen as a way round this law. These long-term contracts are designed to encourage investment in nuclear power plants.

However, Ed Davey admitted that higher energy bills are a possibility as a result of these contracts. He argued that without them bills would still increase as a result of rising wholesale gas prices as the country would have to become more dependent on gas imports.

These guaranteed contracts are based on the difference between the actual market price and a preset guaranteed price for energy, although details have yet to be finalised.

But concerns have been expressed over these contracts for difference. Renewable UK’s director of policy, Dr Gordon Edge, said “Investment decisions for both developers and manufacturers need to be made a long time in advance and it’s key that they get reassurance and understanding of how the market will allow generators of all sizes to produce and sell power”.

On twitter SSE said any intervention designed to bring forward low carbon generation has to encourage investment in all technologies, while the chief executive of npower, Volker Beckers said it was too early to say how the bill would affect domestic fuel bills.

The Government has said in the past that energy efficiency savings will help to reduce energy bills but the study by the Renewable Energy Forum (REF) claims in actual fact many will be worse off with a rise in both domestic and business electricity prices.

REF has analysed Government figures and found that even if its targets for energy efficiency are met, around 17 million households will be worse off. According to The Daily Telegraph  the report says the “DECC has made unrealistic assumptions about the use of energy efficiency measures to offset the costs to households, but even on those optimistic assumptions 65 per cent of households will still be net losers”.

The report claims that climate change policies will be responsible for significant increases in both gas and electricity prices.

It’s not just householders who will be affected either. While the report suggests domestic energy bills will increase by around 27% by 2020, it also suggests that medium sized businesses will find their energy bills increase by around 34% over the same period.

The cost of renewable energy is a continuing argument and cause of tension in the Government. In February, Utility Exchange reported that a number of Conservative MPs demanded a cut in wind farm subsidies a few days after the then Energy Secretary, Chris Huhne, resigned.

However, a spokesperson for the Department of Energy & Climate Change, said a “diverse energy portfolio is crucial for our energy security and to shield our homes and businesses from the sort of price shocks that we’ve seen filter through into our energy bills as a result of rocketing global gas prices”.

He added “We are going to revolutionise the energy efficiency of millions of homes and businesses across the nation through the Green Deal which will launch later this year”.

The Energy Secretary, Ed Davey, said that climate change policies could help to reduce the negative impact of spikes in oil and gas prices. He said the impact of these spikes could be reduced by 50% in 2050 thanks to climate change policies.

His comments were based in analysis commissioned by the Government. The Oxford Economics analysis shows that sensitivity to global price changes could be reduced by the use of sources of renewable energy, new nuclear power plants and an increase in energy efficiency.

Mr Davey said “Of course, there are costs to building more low-carbon plant, but the gains are so much greater, and crucially they are lasting”.

EDF Energy is supposed to be building the new nuclear power station at Hinkley in Somerset but ground preparation works, due to begin in August have been delayed.

It seems the election of François Hollande as President of France has dented the confidence of companies closely associated with nuclear power. France gets 75% of its power from nuclear and EDF Energy is one of the most pro-nuclear energy companies. However, 83% of EDF is owned by the French government and François Hollande has promised to cut back on nuclear power.

There are reports of rising reactor costs but the British government plans to cut greenhouse gas emissions and ensure energy security by replacing old nuclear power plants with modern ones. Already, as Utility Exchange reported recently, E.ON and RWE have pulled out of building new nuclear plants at Oldbury and Wylfa because of the increasing costs.

Without new nuclear power plants there are concerns that more energy will have to be imported and as a result we could see an even bigger rise in energy costs including business electricity prices.

The news that the work on the new power station at Hinkley will not begin until at least next year has pleased campaigners. Speaking from the Stop Hinkley Campaign, Crispin Aubrey, said “this is very good news. We’ve always argued that it’s appalling vandalism to destroy more than 400 acres of Somerset countryside before they even have permission to construct the proposed reactors. This is yet another sign that the UK’s dangerous nuclear enterprise is stumbling”.

Meanwhile an EDF Energy spokesman said “We aim to start the earthworks as soon as practicable and all necessary steps are being taken to ensure that work can start in good time”.

Energy companies have called for the government to make investment in nuclear power more attractive as part of its electricity market reform plans. The chief executive of Centrica, Sam Laidlaw, said recently, “The investment case for nuclear has yet to be proven”, while Vincent de Rivaz, chief executive of EDF, said “It is absolutely critical that the government continues to make steady, tangible progress with its electricity market reform plans”.

Utility Exchange reported earlier this year that a dangerous gas leak at the Elgin platform in the North Sea has resulted in its shut down and an exclusion zone in the area.

As a result of the shut down, gas prices increased by 5% for day ahead delivery. Heavy mud was pumped into the well as part of the work to stop the leak. Total said yesterday that it had succeeded in plugging the leak.

However, the company is unable to say when gas production could begin again. Before the incident the Elgin platform pumped around 3% of Britain’s total gas output. But this North Sea incident hasn’t been the only one for Total. There have also been safety issues in Yemen and a gas leak in Nigeria, all of which have dented the company’s hopes of increasing global output by 2.5% up until 2015.

The well will be monitored over the next few days to ensure the operation has been successful. If the heavy mud has done the trick then there will be no need to drill relief wells although drilling of one of those relief wells began in April.

The chief executive of Total said the leak would cost the company around $300m in lost production if production doesn’t resume before the end of the year.

SSE has seen a growth in its power generation business which has helped to offset its retail operation. The company said the year had been one of turmoil in the global energy markets with economic uncertainty.

The company’s operating costs for its retail division which supplies gas and electricity to both the domestic market and businesses fell 20% to £321.6m. At the same time its operating profit at its wholesale business unit was up 6.4% to £607.9m.

Chairman of SSE, Lord Smith of Kelvin, said “Higher wholesale gas prices, falling demand for energy and a succession of winter storms presented major challenges for the wholesale, retail and networks parts of SSE”.

He added that the profit made by SSE allowed the company to “employ people, pay tax, make investments that keep the lights on and provide an income return that shareholders like pension funds need”.

Higher wholesale gas prices have been blamed by a number of energy providers for increases in both business electricity prices and gas prices.

Meanwhile Phoenix Energy has agreed to sell its gas supply business to Airtricity, SSE’s retail supply brand. Phoenix Supply is the leading gas supplier in Northern Ireland with around 130,000 domestic and business customers in Greater Belfast. The acquisition will mean Airtricity will become the second largest energy supplier and dual fuel provider in Northern Ireland.

The CEO of Airtricity and Director of Business Supply, Contracting and International at SSE, Kevin Greenhorn, said “We’re delighted to be entering into this agreement and see it as an exciting new chapter in SSE’s long-term sustained growth in Northern Ireland. This is a significant step forward for both Airtricity and Phoenix Supply as we seek to become the largest supplier of both electricity and natural gas in Northern Ireland. This is especially exciting as for the first time consumers in Northern Ireland, including Airtricity and Phoenix Supply customers, will be able to enjoy the benefits of dual fuel products and services”.

The acquisition has to be approved by the Irish Competition Authority and the purchase is expected to be completed in the summer.

Research from the Forum of Private Business has found that small businesses are more concerned about business energy costs and telecommunications including broadband, than other infrastructure problems.

The findings come as the trend for business electricity prices and business gas tariffs is upwards.

A survey on Infrastructure for Growth, conducted by the Forum, was completed by members and 80% of those responding said that energy costs are “very important” or “important”. A similar number said telecommunications and broadband access were also issues, especially for those small businesses in rural areas.

75% of those responding to the survey said reliability of energy supply is also an issue with other key issues being mobile communications and e-communications.

The Forum’s Head of Campaigns, Jane Bennett, said “Improving the UK’s transport network is extremely important but infrastructure is about more than just roads and railways – it is about creating a business environment and road map for growth that paves the way for small firms to be successful and create jobs. We want the Government to build on what it is doing to create a joined-up system where projects on transport and communication work in harmony with proactive policies on energy, tax and red tape to boost business and consumer confidence and put the economy back on track”.

With energy costs at the top of the list of infrastructure issues for small businesses it’s still important to compare business electricity prices and gas rates when your contract is due for renewal. Don’t get rolled over into an expensive deal and pay high out of contract rates.

E.ON has announced today that it will not increase residential energy prices for existing customers during 2012 only weeks after revealing that it’s profit for supplying gas and electricity to UK homes last year was less than 2%.

The announcement comes after Centrica, owner of British Gas, warned that gas prices were set to increase again, as reported by Utility Exchange last week. Centrica said the trend for retail energy was for it to go up and it’s thought prices could increase by the end of the summer.

The chief executive of E.ON, Dr Tony Cocker, said “Let me be clear, E.ON will not raise residential prices in 2012. I want every family in the UK to know that we will always do our best to be fair and act in the best interests of our customers. Earlier this year we cut our prices in a way that helped some 75% of our customers and I hope that the certainty we’ve given today will show our customers again that we are committed to helping them, and I also hope that it will help to show millions more that if they look to switch they can find in E.ON a company that puts its customers first”.

He added, “Unfortunately global energy markets are expected to see an overall trend of rising wholesale prices but as a company we believe in acting fairly, which means cutting prices when we can and never raising prices unless absolutely necessary. We will continue to spare no effort in getting our customers energy fit by insulating homes, installing smart meters and providing advice that makes a real difference. That help and action, combined with the price cut announced in February and the promise we’ve made today, mean that E.ON customers can plan for the future and properly control their energy costs, as well as reducing their consumption”.

E.ON launched its Reset Review in January. The company is reviewing all aspects of its relationship with customers including tariffs and bills, payment methods and how products are sold.

Centrica has warned that wholesale gas prices for this winter are around 15% higher than last year. Last summer British Gas increased gas prices by 18% and electricity prices by 16% pushing up the average dual fuel bill to around £1,288 a year.

The energy supplier said it wasn’t just wholesale gas prices which had increased. Other costs have also gone up including transportation and environment subsidies imposed by the government.

Initially Centrica thought prices would increase by around £50 a year but this didn’t include the higher wholesale gas prices so that figure will undoubtedly go up. Higher wholesale gas prices are also likely to affect business gas prices meaning it’s as important as ever to compare business energy prices when your energy contract is due for renewal.

Centrica said “The trend for retail energy costs therefore remains upwards”.

Experts have warned that the 2011 Japanese earthquake is still affecting wholesale gas prices with a possible 28% increase in wholesale prices. Japan has just shut down its last working nuclear power station as reported by Utility Exchange and liquefied natural gas is still being shipped to the country to supply its gas fired power stations. These supplies would normally be delivered to Europe and the UK.

Household gas bills were down this year as a result of a mild winter and increases in energy saving by consumers.

Centrica said its own trading for the past year has been in line with expectations with higher wholesale gas prices and power prices helping its “upstream” operations.

The Queen’s Speech yesterday announced subsidies to help energy suppliers pay for green energy but these could force up electricity bills by as much as £200 a year.

The reform of the electricity market is designed to increase investment in low carbon energy generation and in doing so ensure the country’s energy security by bridging the energy gap.

Utility Exchange has reported in the past that there are concerns that unless there is a big investment in energy generation there may be an energy shortage as old coal fired power stations and old nuclear power plants are shut down. However, it will cost over £110 billion over the next ten years to ensure electricity generation continues and the lights don’t go out.

The Queen’s Speech introduced the Energy Bill which will reform the electricity market. It will bring in long-term contracts that pay new low carbon energy generators a steady rate of return. The reforms are designed to help with the high cost of building new nuclear power plants and offshore wind farms.

It has been reported that improvements to the energy market will increase energy bills by as much as £200 a year over the next ten years but the Government claims the reforms will increase bills by only £160 a year.

The Energy Bill, says the Government, will make electricity “secure, affordable and low-carbon” but The Daily Telegraph reports that it will bring in a number of subsidies to help pay for green electricity.

Energy companies will receive “capacity payments” to keep their power stations running as back up for wind energy. They will also receive “contracts for difference” which means the price of electricity will be artificially raised to make it worthwhile for energy companies to build nuclear power stations.

Energy suppliers will also be banned from building polluting coal fired power stations through another measure, the “emissions performance standard”.

While domestic energy bills are set to rise the measures will also hit businesses. Many are concerned that rising business electricity prices could force them to move their business abroad and make the recession worse.

The chairman of the Federation of Small Businesses, John Walker, said “Whilst we accept there is a need to stimulate investment in a new a generation of nuclear power stations and renewable energy infrastructure, small businesses have been subject to a remorseless increase in energy costs”.

He added, “It is essential that the reform of the electricity markets is accompanied by strong safeguards for consumers and measures to increase competition and break the dominance of the big six energy companies”.

The largest onshore wind farm in England and Wales has been given the go-ahead by the Government. The wind farm will be built at Pen Y Cymoedd and will be made up of 76 turbines. By the time it’s completed the wind farm should generate enough electricity for 206,000 homes.

In a press release, the energy minister, Charles Hendry, said “Onshore wind plays an important role in enhancing our energy security. It is the cheapest form of renewable energy and reduces our reliance on foreign fuel. This project in south Wales will generate vast amounts of home grown renewable electricity and provide a significant benefits package for the local community”.

The wind farm will be built by Vattenfall who said the development would provide benefits to the community including £6,000 a year per megawatt paid into a Community Trust Fund. The developer has also said it will provide £3m for the management of the local habitat and £350,000 for a cycle route.

The news comes after the Conservative chairman of the Commons energy committee, Tim Yeo, called for the Government to stop the delays in deciding where and when to build new wind farms and nuclear power stations.

He said any delays in decision making could result in the lights going out in Britain as the country faced electricity shortages.

There are concerns that as old fossil fuel powered and nuclear powered energy generation plants are shut down there will not be enough electricity being generated to keep the lights on. This is obviously not just a concern to homeowners but to businesses too. If there’s a shortage of electricity then business electricity prices may rise, pushing up business costs.

Speaking at the UK Energy Summit, the chief executive of E.ON UK, Tony Cocker, said that uncertainty in British energy policy meant “people will pause their investments” but the chief corporate officer of ScottishPower, Keith Anderson, thought differently. He said policy uncertainty would lead to short term decision making which would not help in the long term but added that the lights were “not going out”.