Amber Rudd lays out DECC’s priorities for 2015 and beyond
UK Energy Secretary Amber Rudd has answered crucial questions on the Government's approach to energy efficiency, fracking, renewable energy subsidies and climate change.
The questioning, which lasted almost two hours, saw the Secretary of State and her Permanent Secretary Stephen Lovegrove discuss plans to meet long-term renewables and decarbonisation targets and the level of ambition that will be taken to the UN climate change conference in Paris later this year.
The inquiry comes at a crucial time for Rudd’s Department. In just three months since the election, the Tories have overseen the scrapping of a tax exemption for renewable energy, a subsidy cut for onshore wind, a budget cut for DECC, and the Green Investment Bank.
edie has summarised today’s entire session into the key headings below, with soundbites for each. Leave a comment below or tweet us @edie to let us know your thoughts on each of these topics.
Levy Control Framework
The Levy Control Framework (LCF) – which is meant to provide clean energy subsidies through to 2020/21 – has come under scrutiny in recent months.
Last month, Labour MP Alan Whitehead – who sits on the Climate Change Committee – said the LCF was “effectively completely bust” and that the mechanism hasn’t worked in the way it should have, thanks to “the dead hand of the Treasury”.
Today, Whitehead had the chance to question Rudd, who admitted that the Levy Control Framework costs have risen from £7.6bn to £9.1bn by 2020/21.
She said: “I am acutely aware of the need to give some certainty after 2020/21, but I’m also aware we were the first country to give certainty for those five years when we first set it out.
“I am in discussions to see what could be said about a future LCF after 2021.”
Onto one of the most controversial subject areas for the new Tory Government. Just weeks into her tenure as the UK’s new Energy Secretary, Rudd confirmed controversial plans to end onshore wind subsidies, much to the dismay of the industry.
Today, Rudd said: “One of the things I have had to do is reduce subsidies. We remain very committed to onshore wind in so far as they are an important part of the mix. It has deployed faster than people expected and is taking more of the subsidy that is available and is supposed to be capped.
“I think it was right for the consumer that we stepped in and made sure that costs didn’t get any higher by allowing more onshore wind to deploy with subsidy.”
“I don’t believe it became as a big surprise to the industry – it was very clearly set out in our manifesto.”
Former Climate Minister Greg Barker recently told edie he thought it was imperative that Rudd pushed for a strong global climate deal at the Cop21 climate talks in Paris in December. And today, Rudd seemed to agree.
She said: “Paris is the start of the international effort – it’s the start of the process, to make sure we have the architecture in order to achieve our carbon targets internationally.
“A good deal in Paris is everybody signing up – we need to make sure it’s as big a tent as possible. We want 194 countries signed up to keeping two degrees within reach. And then, on top of that, I would like to see five-year reviews in which there will be an aggregate look at how we’re doing.
Asked if she felt comfortable with the level of ambition of the EU’s proposed 40% carbon reduction target expected to be brought forward to the climate talks, Rudd added: “It’s not always right to put the maximum effort you can achieve on the table straight away. We’re trying to bring so many other countries with us, so the fact that the EU has a commitment which is ambitious for the EU but not necessarily for the UK is the right place for us to be now.”
“Energy efficiency is the most effective way to reduce carbon and reduce bills – it is the win-win,” said Rudd.
“I’m particularly ambitious in this area and I want to put together a long-term framework for homes and fuel poverty. I’m looking at the various initiatives that have been in place under the last Government to find out which ones are working best and which ones have not worked well, so that we can work with industry to design a system that will deliver most cost effectively.
“I’m hoping to come forward with some new announcements in this area in the autumn.”
Zero-carbon homes policy
In a shock announcement earlier this month, Chancellor George Osborne announced that the Government would be scrapping the zero-carbon homes policy which was initially designed to ensure new homes built from 2016 met zero-carbon standards.
The UK building sector and big business leaders were quick to hit back, but today Rudd said that the decision has actually just been to “postpone” the policy, rather than scrap it altogether.
She said: “We must face up to the fact that we do have a housing crisis. Getting improvements to the existing housing stock seems like the really big prize to try to work with DCLG on. So, although we’re not having new zero-carbon homes for now, we are working together on seeing what we can do for the existing housing stock.”
Tesla, Powervault and Moixa are just three examples of businesses that have made a foray into the UK’s emerging energy storage sector this year. A recent report estimates that Britain could cut the cost of decarbonising its electricity supply by more than £3.5bn if it can create a grid-scale electricity storage system to balance the variable output of renewables.
Today, Rudd said: “We’d like to see much more successful energy storage. Investing and supporting and working with innovation and scientific communities is going to be an essential part of this going forward.
“I would like to see more co-ordination – perhaps DECC could work more closely with BIS – to deliver more support for innovation. I think storage is a really exciting development – there are fantastic hopes and expectations. It’s not an essential part of delivering electricity and we have to make sure that our renewable growth is accompanied by secure baseload so that we can have constant supply of electricity while growing renewables.”
Carbon capture & storage
A flurry of carbon capture and storage (CCS)-related announcements this year included one from the Government, which said it would spend £4m investigating the feasibility of building the UK’s first CCS plant. But is this the right avenue to go down?
Rudd certainly thinks so. “We remain absolutely committed to the CCS programme,” she said. “It would be a fantastic outcome to deliver carbon capture and storage as soon as possible. We have put the funds aside through the Levy Control Framework and we’re going to be continuing to work with the two projects that we’ve got.”
Another contentious issue. Prime Minister David Cameron famously said he would be going “all out for shale”, but hydraulic fracturing, known as fracking, has been associated with environmental and health risks of water pollution and damage to wildlife.
Last month, Lancashire County Council rejected Cuadrilla’s two fracking applications – a decision which Rudd today said was “disappointing”.
“Shale gas will be an important part of the energy mix for the UK,” said Rudd. “It’s an important part of our decarbonisation targets because it is effectively a low-carbon source.
“Given that gas is going to remain an important part of our security of supply going forward, how much better to have our own gas than to be importing it?
“I remain committed to making sure that we can explore for shale. I am aware that there are concerns about it, but we have to continue to win the battle by reassuring people that the experts in the field have given their stamp of approval.”
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