A look at Britain's energy and climate change sector post-Brexit
Rob Micklewright, Senior Political Consultant
| Dods Monitoring
Dods Monitoring's senior political consultant, Rob Micklewright, summarises the current state of affairs for UK's energy and climate change policy.
As was the case back in January uncertainty is the key word in the energy and climate change sector for the coming months. Uncertainty initially stemmed from a lack of clarity in the Government’s long-term vision for energy policy, but the result of the EU referendum has added another yet another layer.
Since the triggering of Article 50 is not expected until early 2017, the next six months are a key period for the Government to make decisions on issues such as the UK’s future involvement in the EU internal energy market and the emissions trading scheme. In the longer term, clarity will be needed on potential targets for renewable generation, energy efficiency and air pollution to name but a few.
With the Fifth Carbon Budget now written into law all eyes will be on an “emissions reduction plan”, promised by the end of the year, which will aim to set out exactly how the Government plan to meet its decarbonisation obligations under the Climate Change Act. As the CBI set out recently industry will also be looking for further detail on the next contract for difference auctions and the future of renewable support post 2020.
There has been no shortage of speculation on what the new Business, Energy and Industrial Strategy (BEIS) department will mean for energy and climate policy and the direction and functioning of the department will be central to this. Policy speeches by the new ministers, perhaps at party conference, and the first oral question session to the new department may offer some indication.
Following the surprise decision to review Hinkley a government decision on the project is now expected in the autumn. Industry will be looking out for whether the real reason for the delay is Chinese involvement in the project or broader opposition to nuclear power.
On the retail side the Competition and Markets Authority have completed their investigation into the retail energy market making a series of recommendations which the Government have pledged to implement in full “as soon as reasonably possible.” The CMA themselves have a series of consultations due on their proposals before the end of the year and the Government have also said they are keen to see suppliers acting on the recommendations before they consider legislation.
One piece of legislation that will affect the sector is the proposed Better Markets Bill which is expected to include many of the proposals DECC published in draft legislation in January. The Bill was originally due to be led by BIS but the new BEIS department have confirmed they will continue to work on the legislation with a clearer timetable expected in the next couple of weeks.
There have also been delays to the much-publicised consultation on the closure of all “unabated” coal power stations by 2025 with key stakeholder Drax recently stating they believed the plans had been delayed until the Autumn. This would make autumn a busy time for the new department with Charles Hendry’s review of tidal lagoon power and an update on small modular nuclear reactors also scheduled for publication at this time.
The Bonfield Review into energy efficiency in the “able to pay” sector was originally due to be published by Budget 2016, a summer date is now being mooted, but its delay adds to a feeling of inaction in the policy area.
Dods Monitoring has produced detailed policy lookaheads for all the policy areas, with timelines of key events, statistics and reports expected in the coming months.
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