DECC and Defra unveil ‘ambitious’ five-year plans

The Department of Energy and Climate Change (DECC) and the Department of Environment, Food and Rural Affairs (Defra) have published new departmental plans, detailing the UK's energy and environmental policy priorities from 2015-2020.

The plans, released on Friday (19 February), outline how DECC and Defra will spend their annual budgets, of £3.3bn and £2bn respectively in 2015/16.

DECC says it will help the UK “deliver an energy infrastructure fit for the 21st century”, keeping bills “as low as possible for families and businesses” and pushing for ambitious international action on climate change “to safeguard our long-term economic and national security”.

Specifically, Amber Rudd’s department will “ensure the UK has a secure and resilient energy system” by driving a “significant expansion of new nuclear”; considering new smart technologies such as energy storage and demand-side response; supporting fracking to supplement gas production from the North Sea; and doubling funding for energy innovation.

Challenges and opportunities

On renewables, DECC highlighted the changes it has made to the Renewables Obligation (RO) and Feed-in-Tariff (FiT) subsidy schemes , which form part of a package of measures the Government claims will reduce the projected cost of green policies on the average annual household energy bill by £30 from 2017.

DECC’s 5000-word plan has just one sentence on carbon capture and storage (CCS) – the Department says it will consider the advice from Lord Oxburgh’s CCS Advisory Group as it explores its future approach to the technology. DECC also said the Government could support up to 10GW of offshore wind in the 2020s, “if the technology can move quickly to cost-competitiveness”.

The Department added that there remains “significant, untapped potential” for energy savings in the business sector, particularly in light of the Business Energy Tax Review which is the Government is expected to respond to in the 2016 Budget. DECC said it will be spending £295m in public sector energy efficiency over the next five years, “to cut energy costs, save carbon and free up resources for other priorities”.

A key challenge in the plan, DECC says, is decarbonising the UK’s heating supplies. The Department says it will be providing more than £300m of funding for local heat infrastructure over the next five years, and increasing funding for the Renewable Heat Incentive (RHI) to £1.15bn by 2020 to 2021.

Internationally, DECC says it will continue working with the EU to ensure the ongoing development of the Energy Union, and will £2bn of the UK’s £5.8bn funding through the International Climate Fund between 2016 and 2021, to help the world’s poorest countries adapt to climate change.

Commenting on DECC’s new plan, David Reed, head of npower Business Solutions, said: “It’s encouraging to see demand-side response at the heart of DECC’s five-year plan. However, we agree with DECC that there continues to be ‘significant, untapped potential’ for energy savings in the business sector.

“Government and energy suppliers must do more to engage businesses about the impact of energy policy. We should be doing everything we can to help them mitigate the risk of rising prices, maintain UK business competitiveness, and even turn energy into a commercial opportunity where possible.”

Defra’s plans

Meanwhile, Defra’s new plan will help the Department “unleash the economic potential of food and farming, nature and the countryside, champion the environment and provide security against floods, animal and plant diseases and other hazards”.

Liz Truss’ department looks set to increase its work on natural capital, with a comprehensive 25-year plan for the Natural Capital Committee due later this year; and the life of that Committee being extended to at least 2020.

On flooding, Defra will invest £2.3bn by 2021 – an increase from the £1.7bn spend over the past five years – to better protect more than 300,000 homes.

Defra also confirmed it will spend £3bn under the Common Agricultural Policy to enhance England’s countryside, and invest £100m into environmental schemes to remediate contaminated land, restore important peatland habitats and increase woodland planting.

Luke Nicholls

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