Analysing the Government's transition to a low carbon economy

Simon Sjenitzer, Associate Director, Energy & Climate Change Business Development, reviews, and comments on the Government’s Energy and Climate Change Policy in the wake of the Spending Review and amid Climate Change talks at COP 21 in Paris.

On the day of the spending review, the Department of Energy and Climate Change (DECC) Secretary of State, Amber Rudd, stated, “My priority is to deliver secure, affordable, clean energy supplies that hardworking families and businesses across the country can rely on, now and in the future. As we transition to a low-carbon economy as cost effectively as possible, finding new sources of energy that are cheap, reliable and clean is essential, which is why we are boosting our spending on innovation and backing the industries of the future."

Welcoming support for Research and Innovation

So we welcome the extra support for innovation, particularly in the nuclear sector and with a competition to build a next generation Small Modular Reactor. The funding for the decommissioning of our legacy nuclear sites seems safe, but DECC state that there will be £1bn savings through “...better value contracts and.........delaying non-safety-critical projects”.  That may read well to the general public, but professionals in the nuclear sector would have concerns of the knock-on effects such projects will have on the overall goal of cleaning up our legacy sites (and communities) as quickly as possible.

A renewed commitment was made to boost energy efficiency measures across the public sector estate, and further funding for district heat networks. Both these measures should help drive efficiencies through energy saving, and reduce carbon emissions.

Mixed messages on renewable energy and other schemes

A commitment for seed funding new renewable energy technologies and smart grids is always good. It does make you wonder, however, why there appears to be a complete disregard for current proven renewable energy schemes such as onshore wind and solar which are near or lower than the goal of ‘energy cost parity’.

We are currently still waiting for the outcome of consultation on slashing Feed-in Tariffs (FIT) subsidies, and instead we are seeing growing subsidies in Short Term Operating Reserve (STOR) diesel generators to supplement ‘intermittent’ renewables. This probably won’t get a mention in Paris.

Other mixed messages include “The government will increase funding for the Renewable Heat Incentive” which of course is welcomed to help the UK continue to make progress towards its climate goals, but the statement goes on to say that DECC will be “reforming the scheme to improve value for money, delivering savings of almost £700m”.  Since when did an increase result in savings?

Longer term focus

There is continued support for energy intensive industries to protect them from ‘green policy’ costs which might not help towards climate change goals, but it does help to give longer term certainty to industries such as what is left of steel making in the UK. A shame it didn’t help the SSI plant at Redcar, and it does make question whether this is enough help for the industry to survive here.

The nascent Shale gas industry gets a mention too with a guarantee of the creation of a Shale Wealth Fund for the benefit of local communities. Whilst shale isn’t especially ‘green’ and currently seems to have little community support, the offer of additional money to Local Authorities could well help this industry develop and contribute towards energy security when schemes are compliant with all statutory and environmental legislation. 

WYG has a wealth of experience in supporting all these technology schemes throughout their viability, planning, design, procurement and asset management lifecycles.  We support the ongoing transition towards a low carbon economy, and do so helping our clients with the best of our assets.