Electricity market reforms "unworkable", MPs say.

FT: “The Treasury’s refusal to back the energy department’s low-carbon agenda has made flagship electricity market reforms “unworkable”, “vacuous” and counterproductive, the government has been told. A draft bill designed to spur billions of pounds of spending on power sources such as wind farms and nuclear plants is so flawed it is likely to scare off the very investors it is supposed to encourage, says a scathing report from the Commons energy committee, published on Monday. ….The MPs stopped short of recommending the bill should be scrapped entirely, but listed many ”significant changes” to be made before it was introduced to parliament later this year, including amendments to the financial incentives at its centre. ….When the energy department first raised the plan in 2010, it suggested the contracts would be between government and industry, implying the government would underwrite the agreements. Many energy companies welcomed this, believing it would be cheaper to finance projects underpinned by government’s AAA credit rating. But when the draft bill came out in May 2012, it instead proposed what some said was an unprecedented system in which any liabilities were collectively borne by all energy suppliers, not the government.”