A number of key energy policy decisions and announcements have been further delayed, but there a kay takeaways from this Budget.
Carbon tax retained and support for electric vehicles, but questions remain about the shape of industrial policy and what Brexit means for the energy sector.
The UK has a new Prime Minister and, effectively, a new Government, with only 3 Cabinet Ministers out of 24 retaining their posts. The Department of Energy and Climate Change (DECC) has been merged back with the Department for Business (BIS) to create the Department for Business, Energy and Industrial Strategy (BEIS), under Greg Clark. Greg will be familiar with the energy and climate brief, having been Shadow Secretary of State for DECC between 2008-10.
The Government announced on 22 July a number of changes to rein in spending on subsidies for renewable electricity. Given concerns about the impact of these subsidies on energy bills, the aim of these measures is to bring spending back down to within the limits set by the Government’s Levy Control Framework (LCF).
The December 2015 Capacity Auction cleared at £18/kW (2014-15 prices) with 46.354 GW of capacity secured for delivery in 2019-20. The gross payments will cost consumers £834m (2014-15 prices). This briefing note analyses the results and the implications for the GB electricity market.
Having lead the Industrial Revolution with coal as a key energy source, the UK is now aiming to be the first major European country to exit unabated coal fired generation. In spring 2016, DECC will consult on ending the use of unabated coal plant by 2025, with restrictions on use in place from 2023.
For further information please contact:
Partner and UK Chair, Energy and Natural Resources
T: +44 (0)20 7311 5037