Theresa May's Government may have abolished the Department of Energy and Climate Change and merged it with Business to form the new Business Energy and Industrial Strategy (BEIS) department, but all the signs are that low carbon energy generation remains a priority.
Energy security and affordability are ongoing official buzzwords and the challenge for the UK is ensuring that sufficient new capacity comes on line in a timely fashion, while also remaining within the carbon budgets established under the Climate Change Act.
There have been a number of significant developments in the UK energy market in the relatively short time since Prime Minister May took office, with major announcements regarding nuclear, hydraulic fracturing (fracking), carbon capture and storage, renewables and coal.
After initially reviewing the deal to build new nuclear capacity at Hinkley Point in partnership with the French and Chinese governments, the project was finally given the green light, meaning that the UK will have a significant new source of low-carbon energy generation towards the end of the next decade (assuming that planned build-times are met).
Cuadrilla has also been granted a license to extract shale gas at sites in Lancashire, in what is seen as a significant ruling for the fracking industry, with the Government overturning a previous ruling that had blocked the project. Fracking has attracted significant local opposition although it is deemed by the Government to be a potentially important source of reduced carbon energy generation in the short-medium term as coal power is phased out. The Committee on Climate Change estimates that fracking can act as a "bridge" until around 2030 while still enabling the UK to keep within carbon budgets. Thereafter fracking would have to play a rapidly diminishing role. Questions remain regarding methane leakage and the latest BEIS Energy and Climate Change Public Attitude Tracker reported UK support for fracking to be at its lowest recorded level, with net support at 17%. The same survey found that 79% of the public support the development of renewables, with only 5% opposed.
In September a high-level advisory group chaired by Lord Oxburgh provided recommendations to BEIS in relation to the future role of carbon capture and storage. BEIS is now considering recommendations that the Government set up a new state-backed company to support the construction of the infrastructure necessary to pipe emissions into exhausted oil and gas fields under the North Sea.
BEIS has also launched a consultation on approaches to put into effect the closure of unabated coal power stations by 2025. The Government also set out plans to upgrade UK energy infrastructure and increase clean energy investment, including details on the first 290 million of Contracts for Difference (CFDs) funding for renewable electricity. The Government reaffirmed its commitment to spend 730 million supporting renewable electricity projects over this parliament, with the aim to produce enough renewable electricity to power one million homes and reduce carbon emissions by around 2.5 million tonnes per year from 2021/22 onwards. The application process for the CFD allocation round will open in April 2017.