https://decc.blog.gov.uk/2015/11/18/new-direction-for-uk-energy-policy/

New direction for UK energy policy

Affordable, reliable energy is critical to our economy, to our national security, and to family budgets.  Our challenge is how to ensure energy remains the backbone of our economy while we transform to a low carbon system.

We are doing all of this to provide the foundation of our future economic success:

Secure energy so that people can get on with their lives and businesses can plan for the future.

Affordable energy so the people that foot the bill, the households and businesses of Britain, get a good deal.

And clean energy to safeguard our future economic security.

Energy Security

Energy security is my first priority. It is fundamental to our economy’s health and to people’s lives. It underpins everything we need to do. I want a consumer-led, competition-focused energy system that has energy security at the heart of it: one where markets flourish, which is open to trading and where competition keeps prices down.

Securing supply and the role of gas

We have a robust plan for securing supply.

Gas we use in our homes and businesses is relatively cheap and secure thanks to a diverse supply of pipelines - but we import half of it.  Encouraging investment in shale gas exploration will help add new home-grown supplies to the mix and create a bridge to developing renewable energy, improved energy efficiency and new nuclear capacity.

In the next ten years we need new gas-fired power stations: gas is central to our energy secure future.

Climate change and decarbonisation

How do we live up to the challenge of decarbonisation?  Climate change is an issue of environmental responsibility and of economic security.  It is a global issue. Action by one state will not solve the problem.  It’s what we do together that counts.  That is why we are pushing for a strong global deal in Paris as a platform to transform the world into a sustainable low carbon economy.  But Paris won’t be the end.

Britain’s role in this global effort is to demonstrate to the rest of the world how to cut carbon at the lowest cost, delivering economic growth and affordable energy prices.  Our Climate Change Act has led the way and is inspiring others.  We met our first carbon budget and we’re on track to meet two and three, but there’s a gap on the fourth.  We need pragmatic action to meet it, across the economy and we will set out our plans next year.

Controlling subsidies

To set a global example we need a cost effective approach in generation, by controlling subsidies and balancing the need to decarbonise with keeping bills low.  And we have to get the balance right.  New, clean technologies will only be sustainable at the scale we need if they are cheap enough.  When costs come down so should support. Subsidy should be temporary, not part of a permanent business model.

Coal

I want us to become the first developed country to deliver on a commitment to taking coal off the system. We will consult next spring on whether and how to close all unabated coal fired power stations by 2025 and restrict the amount that can be generated from 2023.  But, we will only do it if we can shift to new gas in time.

Offshore wind

I believe Government must intervene where it can really make a difference.  We are world leaders in offshore wind and globally we can make a lasting technological contribution.  On current plans we expect to see 10GW of offshore wind installed by 2020. If – only if - Government’s strict conditions on cost reduction are met we will make funding available for three further auctions this Parliament, the first by the end of 2016. If offshore wind moves quickly to cost competitiveness we could support up to a further 10GW of offshore wind projects in the 2020s.

North Sea Oil

Like industry, investors need certainty and I want to provide it for UK oil production. The North Sea offers significant value to the UK and has ongoing potential and we must act to safeguard it.  That’s why we have created the Independent Oil and Gas Authority and are beginning a consultation on a Strategy to Maximise the Economic Recovery of the North Sea.

Innovation

To deliver the kind of system change we need we must unleash innovation to develop energy technologies that will take off at scale.  Government’s role is to create the conditions for new ideas to flourish by removing barriers that get in the way.

Smart meters are the basis of an approach that could allow radical new models to develop, sparking new ideas, creating new efficiencies, keeping costs low.  They will be in every home and small business by 2020.  But they alone won’t fully realise the benefits of a new approach. A fully smart system could help reduce costs dramatically.

National Grid plays a pivotal role in keeping the energy market working; and there is a strong case for the system operator to have more independence to allow it to adapt to necessary changes as the system changes. Alongside the National Infrastructure Commission, we will work with National Grid, Ofgem and others to consider how to reform the current system operator model to make it more flexible, responsive and independent.

DECC funding for innovation is already supporting the development of transformative technologies here in the UK; in energy storage, in low carbon transport fuels, in more efficient lighting.

Heat

And we need to look towards a strong long term plan for heat. It’s the cause of a third of emissions, but progress to innovate and decarbonise has been slow. I want to test new approaches to find out what works best. We will set out our approach next year, as part of our strategy to meet our carbon budgets.

Energy efficiency

I’m determined that energy efficiency is concentrated on those in greatest need. The cheapest energy is the energy not used; and we’re committed to ensuring a million households benefit from energy efficiency improvements in this Parliament.

For businesses, energy efficiency can reduce costs, which in turn improves productivity and competitiveness. But the tax and policy framework designed to encourage this is complex and we are now looking at streamlining it.

These are my priorities; for our energy security, for our economy and for our future.

Now let’s get on and deliver them

6 comments

  1. Jane Needham

    So why are you cutting Feed-in tariffs, and have stopped Green Deal and watered down Energy Company Obligation funding?

    Empty words at the moment. Talk is cheap. back it up with action.

    All you have done so far since coming into Parliament is hit all those small businesses who put their trust in the Govt and who have been working hard to try and make Green Deal, FiTs and RHI work for the public and business by withdrawing policies without putting something else in their place. We have worked hard to meet all your accreditation requirements, which has involved spending money on training, leaflets for the public, software etc, to try and earn a crust for our families only to be kicked hard. Your announcement in July about stopping Green Deal instantly cut our income by 50%, AND left us with unhappy customers for a reason completely beyond our control as we had noting to offer as a replacement. It hurt our business not just in the pocket because of this, but also reduced trust in our business. That is not fair or equitable.

    I am dis

    Link to this comment
  2. Oliver Harwood

    Dear Mrs Rudd
    if you switch to gas fired power stations you should at the same time make every effort (including the necessary RHI and FIT support) to ensure that as much gas as is feasibly possible is produced by Anaerobic Digestion of wastes and co-products.
    Many years ago it was calculated that AD could provide sufficient renewable gas to heat 50% of the homes in the country with entirely carbon neutral fuel, using existing infrastructure.
    Please read the Ernst and Young report.
    http://www.businessgreen.com/bg/news/1802812/national-grid-gbp10bn-biogas-network-meet-half-domestic-heating.
    Thank you
    Oliver Harwood

    Link to this comment
  3. Jon Lewes

    "We’re committed to ensuring a million households benefit from energy efficiency improvements in this Parliament", states Amber Rudd

    Good to know, and now it would be good to hear how that's to be done, and working at an average annual rate of 200,000 of UK's 26m homes....

    Meanwhile, the volunteers at the Home Energy Centre, now active in the Somerset communities of Ilminster and in Chard, are committed to continuing to turn Amber Rudd's words into actions., We are talking directly with householders and advising them with impartial independent advice at the Centre's community-based premises.

    The Home Energy Centre encourages households with info on energy-efficiency measures so as to reduce energy consumption,and as a result to reduce their energy bills and their carbon footprint..
    Actions can be straightforward..We've reduced one pensioner's electricity bill from £160/month to £60/month by suggesting actions to take including not running the 43-year old towel rail all day and by replacing her 25 year old kitchen appliances.including the fridge and the cooker

    Householders, contact the Centre to find out what can be done!..

    Switch Off Fossil Fuels. Act. Now

    Link to this comment
  4. Denise Mawhood

    I note that you make no mention of solar or onshore wind which are the two most cost effective renewable energies in Britain. I was shocked to from the Solar trade site that subsidies to solar are to be slashed to the same level as Buckinghamshire"s pothole repair fund. Solar will also be losing thousands of jobs.

    Britain is the only member of the G7 who is actually increasing subsidies to fossil fuel companies!
    We can afford to subsidise fossil fuels;we cannot afford to subsidise renewables! No wonder we have gone from AAA rating to AAB on energy this year! No wonder we are failing to reach our carbon commitments. Germany is seeking to replace all it's energy with renewables. Britain - a tired Dash for Gas, with the threat of fracking in Areas of Outstanding Natural Beauty. Our country boasts of a carbon reduction of 8%, but the CCC points out that 2% of this is due to warmer winters and 2% due to outsourcing of heavy industry to developing countries. PLEASE take the advice of the CCC and set out a more sensible energy policy. If , as looks,increasingly likely, climate change goes over 2'degrees, as the IPCC report points out global warming is likely to continue for centuries if not millennia. PLEASE think,of,our children. PLEASE think of the impacts
    Of climate change in your own lifetime.

    Link to this comment
  5. Dave Voisey

    It concerns me that no information is included about tidal power generation This is despite construction going ahead on the Atlantis Project by MayGen in the Pentland Firth. This project is scheduled to be producing power in 2016.

    It is proposed that this project will ultimately have over 280 turbines and be capable of producing 20% of the UK's power requirement.

    I would not dare to suggest that information about the benefits of tidal power are being suppressed

    Link to this comment
  6. Jason

    Dear Rudd MP.

    Whilst i support the statement to close coal fired stations, the word "whether" it that statement doesn't leave me with any confidence at all. Based on your actions to date, i suspect this is more related to the push for gas, all your policies to date appear to be based on this, more than happy to be proved wrong.

    Boasting about improving the efficiency of 1.2m households over the last 5 years is an insult to our intelligence (80% reduction from 5 years before), a mixture of this and the housing standards review will drive drive consumption up in millions of homes. Please stop talking about helping Hard Working Families, nothing that has been done during your tenure will do anything to support them in the medium/long term.

    The Energy Efficiency industry is in tatters, this formerly leading industry supported more jobs/£ than any other in the energy sector and has the biggest impact. Why no announcement for future funding?

    Link to this comment