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Renewed UK Government business plan clarifies renewable energy scheme

As part of coalition changes, the Department of Energy and Climate Change (DECC) has published a business plan confirming and clarifying commitments for the period up until 2015.

The Business Plan 2011 – 2015 provides details of how commitments will be implemented, including dates for milestones, coalition priorities and departmental expenditure.

Renewableenergy generation

  • As before the DECC's overall aim is to obtain 15% of energy from renewable sources by 2020;
  • As previously announced the Renewable Heat Incentive (RHI) scheme is due to start in June 2011. The RHI scheme will provide support for renewable heat technologies, from household thermal panels to industrial wood pellet boilers. Full details of the scheme, including tariffs and technologies supported, are due to be announced before the end of this year;
  • A review of feed-in tariffs is scheduled for 2012 and the Government has identified scope to cut feed-in tariff costs by 10%;
  • There is only one reference to offshore renewable energy, which is that "proposals for tackling the regulatory, legal, planning and technical barriers to coordinated offshore grid development in the North and Irish Seas" are to be published in December 2012; and
  • The plan highlights the importance the DECC places on international support for the UK’s low-carbon development and energy security objectives. Outlined in the plan are: Agreement plans for cooperation with “Norway on oil and gas, CCS and renewable”; launch of new energy dialogues with China and Brazil; and secure multi-country and business commitments on overcoming the barriers to deployment of CCS at the Clean Energy Ministerial to be held in Abu Dhabi.

Energy efficiency and smart metering

  • As previously announced, the Green Deal is due to be available from October 2012. The scheme will offer householders and businesses the opportunity to fund energy efficiency improvements through savings on their energy bills. The plan sets out the stages in the development of the Green Deal, including that a precursor to the Green Deal (an Early Green Deal) will be developed with potential providers and launched in December 2010. Furthermore, an Energy Security and Green Economy Bill is due to be introduced to parliament in December 2010 that will create the legislation underpinning the Green Deal and the new energy company obligation;
  • The plan sets out a framework in which to establish a smart electricity grid which includes working with industry to develop a framework for smart energy standards. Also, as part of the Electricity Market White Paper (due for publication May 2011) aims to “set out a strategy for future electricity networks to increase efficiency and reliability of the network; enable flexible demand management and the use of electric vehicles; and support integration of more local and wind-powered generation.”;
  • The implementation plan for smart electricity and gas meters is due in April 2011 with full roll out due to start summer 2012; and
  • DECC is developing a National Energy Efficiency Data (NEED) framework that will include property level data on energy consumption and energy efficiency and fuel poverty for around 4 million properties.

Expenditure

  • The plan sets out annual DECC expenditure, broken down to administration spending, programme spending and capital spending; and
  • Spending is due to increase from a £2.9 billion baseline in 2010/11 to £3.7bn by 2014/15 although this rise is mainly due to capital spending for the Nuclear Decommissioning Authority.

The plan also includes a section on what the DECC will no longer fund, including "technologies unless [DECC is] confident that they are the most critical to meeting long-term decarbonisation and energy security objectives."

This implies that much stricter criteria will be applied to any grant funding or other financial support that is available, as well as having implications for the review of the feed-in tariff in 2012 and the review of the Renewable Obligation Certificate (ROC) banding in 2013.

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