Energy policy in the UK is at a crossroads, and the decisions made now will reverberate for decades. At least 43 gigawatts of new electrical generation capacity, equivalent to half of Britain’s current total, will be needed by 2020, as all but one of its nuclear plants are retired and coal-fired power stations closed to meet EU air pollution standards.

A staggering £200bn of investment will be needed not only to maintain energy security against price spikes as North Sea resources dwindle and energy imports grow, but also to deliver the largest single contribution to a low-carbon economy. (more…)

Energy efficiency should be at the centre of UK energy policy by now. The so-called fifth fuel has always been the cheapest and best environmental option.

To be fair, there are a number of coalition proposals afoot for the Autumn that will further the cause: the extended Carbon Emissions Reduction Target, a Renewable Heat Incentive and a Green Deal that will see home energy efficiency upgraded through long-term loans paid for by savings on bills, to name the key ones. (more…)

During the count-down to George Osborne’s emergency budget of June 22 (ENDS Report, June 2010) a real sense of expectation grew that the chancellor would announce concrete new policies on energy and climate change. In the event, nothing of the sort happened.

Yes there were fleeting references to new policies. But in each case there was no advance on details already set out in the coalition’s sketchy programme for government (ENDS Report May, 2010). The further delays are doing little for investor confidence.

Especially frustrating is the lack of progress on the most radical policy – replacement of the electricity component of the Climate Change Levy (CCL) by a “top-up” carbon tax on power generators.

The tax would kick in whenever emission allowances in the EU Emissions Trading Scheme drop below an as yet unspecified threshold. This would effectively set a carbon floor price, providing a more consistent signal in favour of low carbon investment.

The plan remains on the table, but now looks set to be seriously delayed. (more…)

In its dying days, the Labour government bequeathed to its successors a rich mix of energy and climate targets, legislation and guidance. Most of this will survive in some form.

At the heart of UK climate and energy policy is the Climate Change Act 2008 and last summer’s Low Carbon Transition Plan. This aims at cutting UK greenhouse gas emissions by at least 34% by 2020 relative to 1990 and delivering a low carbon economy by 2050. Departmental carbon budgets have provided more detail on what is expected from each sector of the economy. (more…)