Parliament has seen “watershed legislation” for the island’s energy sector with a new bill that will open up the electricity market, according to Grant Gibbons, the Minister of Economic Development.

The Electricity Act 2016 will also “redefine the incumbent utility”, Dr Gibbons told MPs this afternoon.

As well as opening up electricity generation to other participants than Belco, the bill will introduce a “much more robust and agile regulatory framework”.

Regulation of supply will be transferred from the Energy Commission to the Regulatory Authority, which will license generation, transmission, distribution and sale.

The bill adds energy as a regulatory sector along with telecommunications.

As well as opening up production, customers who can cover their energy needs will be able to go “off the grid”, Dr Gibbons said, Belco retains a licence over transmission, distribution and retail sale, but power supply can open up to producers from small home generation to utility-scale power plants.

Sources such as solar, wind and waste to energy production will be able to join the grid, while new base load fuels such as liquefied natural gas may replace existing fossil fuels. The Regulatory Authority will also be charged with setting rates.

The authority will work with Belco to develop an integrated resource plan for a modernised and sustainable energy scheme, Dr Gibbons said.