DECC’s priorities are clear: keeping bills as low as possible for hardworking families and businesses and powering the economy while decarbonising in the most cost-effective way.
These are a challenging and critical set of objectives.
DECC has a long term plan, underpinned by carbon budgets, to meet our responsibilities.
Savings from last year have enabled us to protect spend on key areas for 2015/16 including maintaining secure supplies and reducing greenhouse gas emissions.
Departmental spending will be set out in the Spending Review this autumn and the Department is developing a new operating model which will allow us to work in a smarter, more focused and efficient manner.
Keeping the lights on is non-negotiable. Our modern technological society cannot function without power. A diverse mix, including home-grown sources, provides the most resilient system.
Tackling climate change is also non-negotiable. Climate Change isn’t just a threat to the environment. It’s a threat to our national security, to global security and to our long-term economic prosperity. A global deal is the only way both to deliver the scale of action required and to drive down the costs of climate action; so Paris 2015 is both a serious opportunity to avoid its catastrophic effects and to open up new avenues for low carbon industries.
Going for clean energy makes economic sense. And it makes business sense: clean energy is a boom market – bringing jobs and investment and growth. But it only makes sense if we keep costs pinned down.
The vital financial support that has been provided to the renewable sector has helped new and innovative technologies while increasing the amount of low-carbon electricity that powers homes and businesses across the UK.
Financial support has already driven down the costs of renewables significantly and these are continuing to fall, making it easier for the industry to thrive without subsidies.
To work for everyone, de-carbonisation has to be affordable and sensitive to the impact it has on people’s pockets and wider economic circumstances. New measures such as the early closure of the Renewables Obligation to onshore wind will provide us with better control of spending and ensure bill payers get best value for money as we continue to move to a low-carbon economy.
And in line with keeping bills as low as possible and ensuring markets work for consumers, we are proposing to introduce competition to the way our networks deliver electricity which will open up the energy market to innovation and could potentially save British bill payers £390 million over 10 years.
De-carbonisation must work in particular for the local communities where infrastructure is built. In the Energy Bill introduced this week, as well as keeping bills down, reforms to onshore wind subsidies will put more power in the hands of local people to decide on this now mature technology. The Bill will also help reduce our reliance on foreign imports and support jobs and growth by reinvigorating our domestic oil and gas industry.
The role that UK business can play in meeting the UK’s climate change targets is undoubted. By incentivising reductions in energy consumption and emissions, the government is giving business the tools to achieve that goal.
Likewise, by creating a simple energy tax system that rewards energy and carbon saving, and allows businesses to increase productivity, support growth and ensure their place in a competitive global market, cutting red – or green - tape and bureaucracy. We want to collaborate with industry and the wider green economy sector in the coming months to ensure we develop a framework for simplicity and stability.