The UK’s coalition government has agreed a landmark policy that will improve investment in the energy sector, the Department of Energy and Climate Change (DECC) announced today
However, the upcoming Energy Bill will not include a decarbonisation target for 2030. Instead a decision on whether to legislate for a 2030 decarbonisation target will be taken after the next election in 2016.
The lack of a decarbonisation target will push investment away from renewables towards an energy supply that would offer the lowest upfront cash requirements, namely gas.
The UK Renewable Energy Association (REA) said, “With the UK set to be up to 80% dependent on imported gas by 2020 the once-in-a-generation investment phase is essential for safeguarding national energy security.”
The Levy Control Framework, which controls expenditure on renewable energy that can be levied through energy bills, is to be tripled to £7.6 billion (over US$12 billion) in 2020 (real 2012 prices), which now also includes support for nuclear and CCS.
The REA said, “This means that the renewable power sector can be confident it has the financial backing to enable it play a major role in securing the new investment the UK urgently needs as ageing coal and fossil plant are retired.”
The Energy and Climate Change Secretary Ed Davey said, “This is a durable agreement across the Coalition against which companies can invest and support jobs and our economic recovery.
“The decisions we’ve reached are true to the Coalition Agreement, they mean we can introduce the Energy Bill next week and have essential electricity market reforms up and running by 2014 as planned.
“They will allow us to meet our legally binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers.”
REA Chief Executive Gaynor Hartnell, in responding to the bill said, “The commitment of the necessary budget for the renewable power sector to meet its share of the 2020 target is very welcome news. This should help to draw a line under the recent politicking, which has been so damaging to investor confidence.
“Today’s announcements finally give a suggestion that the Government is getting behind the renewables agenda, which promises 400,000 green jobs across power, heat and transport by 2020, along with a much more secure energy future”.
Maybe it's because it's still raining outside - but I am not as convinced as you are Gaynor, heat and transport ? Come on Ed, keep at it !