What’s the UK’s energy statement: ‘Boo-yah!’ or ‘Meh’?

When it comes to building a secure, low-carbon future for the UK, the new coalition government says it aims to succeed where the previous government failed. And the coalition’s first-ever annual energy statement, unveiled today, does reveal some new directions … although not necessarily revolutionary ones.

The key question looming with the energy statement’s release is whether the government’s plans have enough teeth to turn paper goals into reality. Among the proposed actions that appear to come closest are:

• A commitment to double environmental inspections of offshore oil and gas rigs and undertake “a full review of the oil and gas environmental regime following the outcome of investigations into the causes of the Gulf of Mexico incident.”
• A call for the European Union to raise its 2020 target for greenhouse gas emissions reducttions from 20 per cent to 30 per cent.
• A commitment to remove obstacles to the development of new nuclear power as long as plants can be built without public subsidy.

Other elements in the statement’s 32-point action plan, however, are on the fuzzy side:

• The government is launching a new Green Deal to remove the barriers to energy efficiency and help “every participating householder to save money by insulating their home.” However, the Green Deal as described looks to be voluntary on the part of energy companies, which still appears to put energy efficiency in the “nice to have” rather than “must have” category.
• The statement also singles out the fuel poor as a “super priority” group, and notes the Energy Act 2010 gives the government the power to mandate energy companies to support this group. However, it doesn’t commit to using that mandate but says the government will “take a decision on whether to introduce mandatory support following the Spending Review.”
• Officials reiterate their support for a Green Investment Bank that can help provide the £550 billion in funds needed to meet the UK’s 2020 climate and clean-energy goals. However, the statement for now commits only to publishing proposals for the bank after the government’s Spending Review.

The references to decisions to be made after the Spending Review raise some red flags in light of the coalition government’s recently announced significant cuts to low-carbon technologies and investments.

Alongside the new energy statement, the Department of Energy and Climate Change (DECC) also released a prospectus outlining how to meet the previous government’s goal of 100-per cent smart metering across the UK by 2020 and announced it would review Ofgem’s role as regulator of Britain’s energy markets. Furthermore, it published a report outlining ways in which to meet the goal of cutting greenhouse gas emissions by 80 per cent by 2050, and launched an online calculator to help policy-makers, energy companies and consumers track the implications of such strategies.

“The 2050 Calculator provides the most comprehensive, long term analysis ever undertaken by government,” said Energy and Climate Change Secretary Chris Huhne. “The challenge is ambitious but achievable.”

Huhne added, “The era of cheap, abundant energy is over. We must find smart ways of making energy go further, and value it for the costly resource it is, not take it for granted. And even as we reduce overall demand for energy, we may need to meet a near doubling in demand for electricity, as we shift industry, transport and heating onto the grid … Choosing the high carbon alternative would be high risk. It would lock in exposure to volatile oil prices, declining global reserves and rapidly increasing global energy demand. We’d risk having a dead-end economy lagging behind those with the foresight to grab a share of growth in green industries.”