The Department of Energy and Climate Change (DECC) has unveiled its new plan from 2015 to 2020.
It has set a limit of £3.3 billion of total departmental expenditure in 2015/16 and a vision for “secure, affordable and clean energy supplies”.
“We will meet these goals by nurturing competition and supporting innovation in new technologies. This will help keep bills as low as possible for families and businesses. We are also pushing for ambitious international action on climate change to safeguard our long term economic and national security,” the document states.
It has set out five key objectives: ensuring a secure and resilient energy system, keeping energy bills as low as possible for households and businesses, securing ambitious international action on climate change and reducing emissions cost-effectively at home and managing the UK’s energy legacy safely and responsibly.
It adds ensuring a secure supply of electricity and oil and gas is a priority and the government aims to work across all sectors to make sure the UK has a “well-functioning, competitive and resilient energy system”.
DECC’s long term plan for “predictable and clean electricity” includes a “significant expansion” of new nuclear.
It will also consider new smart technologies such as storage and demand-side response, looking in particular at where it is possible to remove policy and regulatory barriers and catalyse further innovation.
The plan states: “It also includes introducing more competition wherever we can such as for certain large electricity network assets. We will also consider how to reform the current system operator model to make it more flexible and independent. In parallel, we will continue to take steps to reduce overall demand through better energy efficiency.”
To supplement production from the North Sea, the government will also continue to support the “safe development” of shale gas.
The document adds the government will “review the operation of the Capacity Market” and expects changes to support for renewable energy to reduce energy bills by £30 from 2017.
Support for business
DECC believes there’s “significant untapped potential” for energy saving in the business sector despite the energy intensity of the UK economy falling by 24% since 2004.
It states: “Realising this potential will improve businesses’ productivity and will also support growth but the business energy tax and policy framework is complex and businesses tell us it does not provide the incentive it could to reduce energy consumption. The government has therefore consulted, through the Business Energy Tax Review, on how to reduce administrative burdens while improving the effectiveness of policy in driving cost-effective energy and carbon savings.”
With the public sector a major energy consumer, spending around £4 billion a year, the government is investing a further £295 million in energy efficiency over five years to help cut costs and emissions.