UK Cleaner energy legislation - July 2008
Friday 18 July 2008
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The government is currently seeking to reduce UK emissions by 60% before 2050, but faces pressure from environmentalists to increase this goal towards 80%.
And, from Europe the UK also now faces a target to generate 15% of all energy from renewable sources by 2020. With slow progress in heating and transport fuels, this could translate to a 35-40% proportion of electricity to come from renewable sources within 12 years.
Meanwhile, as energy consumption continues to grow each year, the UK will also need to replace around 30-35 GW of aging coal and nuclear power stations over the next two decades to maintain energy supplies.
Market delivery
The UK government's approach to fostering low carbon energy is based on the market delivering what is needed, prompted by incentives, tradable allowances, subsidies and environmental taxes.
The Climate Change Levy, from 2001, was the first measure to target greenhouse gas emissions, through a tax on all non-domestic energy bills. Although the levy has been made neutral to business as a whole through reductions to employers' National Insurance contributions, it has seen business energy bills rise by 8% to 10%.
Since the Energy White Paper of 2003, three new significant mechanisms have been pushing the low carbon energy agenda - the Emissions Trading Scheme (ETS), the Renewables Obligation (RO) and the Renewable Transport Fuels Obligation.
A major review of energy policy was then carried out in 2006, prompted by Sir Nicholas Stern's report into the economics of Climate Change, leading to the next Energy White Paper in 2007. This set out plans for stronger action from the government, centred around a target to move towards a 60% cut in emissions by 2050, including real progress by 2020.
It included proposals to strengthen the RO scheme and set out a way forward for both renewable energy and also other alternative power technologies, including nuclear power and CCS.
A series of new Acts in late 2008 implemented measures from the 2007 Energy White Paper, including the Energy Act 2008, Climate Change Act 2008 and Planning Act 2008.
A new Marine Bill in 2009 is shaping the next generation of offshore renewable energy projects. See our Planning page for details of the planning and marine bills.
And, as well as a new Renewable Energy Strategy now being prepared by the government for a 2009 publication, to lay out a long-term "roadmap" for renewable energy in the UK, a Heat and Energy Efficiency Strategy is to be produced. This should pave the way for more support for renewable heat.
For more on this UK energy legislation, see the following resources:
