The Energy Act, passed on 8 April 2010, gives statutory effect to parts of the UK Government's Low Carbon Transition Plan, which aims to deliver emissions cuts of 34 per cent from 1990 levels by 2020 and of 80 per cent by 2050, while maintaining security of supply, maximising economic opportunities and protecting vulnerable consumers. The Act:

  • introduces a carbon capture and storage incentive to support the construction of up to four UK demonstration projects;
  • provides for mandatory social price support to reduce energy bills for the most vulnerable (this would replace the current voluntary agreement which expires in 2011);
  • increases the powers of the energy regulator, Ofgem, to deal with exploitation of electricity distribution constraints by generators;
  • increases Ofgem's power to fine companies;
  • clarifies Ofgem's objectives on tackling climate change, ensuring secure energy supplies and the role of measures other than competition in protecting the interests of consumers; and
  • gives the Secretary of State the power to ban cross-subsidy between gas and electricity accounts.