New energy beginnings
The Chinese proverb of living in interesting times has been used and abused over recent months. To cast your mind back to the world before 23 June - precisely one month ago - gets harder each day.
While speculation and debate about the consequences of Brexit was widespread, and many questioned the future of DECC, few predicted what eventually emerged for our industry during the cabinet reshuffle. The abolition of DECC and creation of the Department for Business, Energy and Industrial Strategy has been greeted with dismay by some, but also with plenty of enthusiasm by a wide range of environmental groups, industry figures and politicians.
The risk of a dilution of focus on the energy agenda bequeathed by DECC sits alongside the opportunity to take a whole economy approach to delivering climate change ambitions, effectively balancing the priorities of growth and carbon reduction.
It is worth reminding ourselves that DECC oversaw a significant increase in the amount of renewable energy generation operating in the UK, pushed the agenda for community energy, designed a suite of new policy initiatives which will enable the UK to further decarbonise its energy mix and progress climate change objectives as well as ensuring the lights stay on at least cost to the consumer.
There are plenty of signs that BEIS will remain committed to those goals. Government has made clear there is a full function transfer from DECC to BEIS and new ministers have a track record on a transition to lower carbon generation and come with experience in shadow energy portfolios and parliamentary committees.
But there are undeniable challenges as well. The department has a wide brief and the remit for industrial strategy in a post EU environment will provide many competing priorities. BEIS will need to provide clear political leadership, focus on the big decisions that need to be taken and demonstrate that the changes provide a better framework for stable energy policy.
Of greatest and most immediate value as we move toward capacity auctions, will be a re-affirmation of the government’s commitment to its carbon reduction target. That would help to avoid a period of policy and investment uncertainty. Our members stand ready to deliver the billions of pounds of investment that are needed to continue the decarbonisation of the electricity system, but need the assurance of a clear policy framework in order to deliver it.
Of course, Energy UK and its members will work with whatever structure Government to help chart a course to a secure, reliable and more sustainable energy sector that remains affordable to consumers.