UK Government announces 40-year energy action plan

• 14 years ago (2010-07-29)
• David Flin

Europe 1094 Nuclear 665 Renewables 780

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The UK Energy and Climate Change Secretary Chris Huhne presented the UK’s first ever Annual Energy Statement to Parliament on 28 July, in which he outlined a 32-point action plan for the next 40 years. The 32 key actions fall in four areas: energy saving through the Green Deal; secure energy supply towards a low-carbon energy future; driving action on climate change; and managing energy legacy responsibly and cost-effectively.

The Annual Energy Statement outlines various aspects of Government policy, including:

• A consultation followed by a White Paper in Spring 2011 on electricity market reform, including discussion of a carbon price, emissions performance standard, revised renewables obligation, Feed-in Tariffs and capacity mechanisms.
• A review of Ofgem’s role as an energy regulator, with a report in Spring 2011, followed by a possible reorganisation.
• An overhaul of planning for major infrastructure, followed by a consultation in Autumn 2010.
• A new transitional regime for offshore wind farms already operating or being built with the promise of an enduring offshore transmission regime in the future.
• Proposed new standards covering suitable biomass for electricity generation and new support in the form of a Renewables Obligation fixed for 20 years.

An analysis of the effects of these policies on energy bills is due to be published in the next few days, and this will be repeated annually.

In addition, the Government has brought out, jointly with the energy regulator Ofgem, a prospectus for its smart meter rollout plan for every home and business, which will see a significant acceleration on current targets.

Huhne said: “The challenge is ambitious but achievable. We are already on track to cut the UK’s emissions by 34 per cent by 2020, and will do more if we can win the case for greater ambition across the whole EU.” He also said that the “era of cheap, abundant energy is over”, and that it must no longer be taken for granted. Huhne added that demand for electricity could double – even with a reduction in total energy demand – as transport, industry and heating become more electricity dependent.

Absent from Huhne statement to Parliament was any comment about nuclear power, an issue over which the partners in the UK coalition government are deeply divided. Privately, Huhne repeated the Government’s official commitment to nuclear power, claiming that the country is on target for new nuclear capacity.

Jim Fitzgerald, Assistant Director at financial experts Ernst & Young, said: “The statement indicates a positive outlook for a wide range of low carbon technologies, importantly on both the supply and demand side of the energy equation. Policy support for energy efficiency and embedded generation are expected to increase investor interest.”