Department of Energy and Climate Change

Edward Davey comment on the EU Environment Council meeting in Brussels

Fri, 9 Mar 2012 19:24:00 GMT

09 March 2012

Speaking after 9 March EU Environment Council meeting in Brussels, UK Energy and Climate Change Secretary Edward Davey said:

“I'm sorry that Poland couldn't join the rest of the EU today in backing strong action on the low carbon economy.

“The outcome shows how we must redouble our efforts in explaining to Poland that shifting to a low carbon economy is part of long term growth in Europe. I'm going to be working with the Poles to make that case.

“There's been a clear call today from 26 countries for the Commission to come forward with policy proposals to help deliver the low carbon economy and I encourage them to do that as soon as possible.

“There'll be no pause in the UK's efforts to push for a 30 per cent emissions target for 2020, providing the much needed certainty that business needs to invest in the green technologies of the future."

Letter from Edward Davey regarding onshore wind energy, published in The Times

Fri, 9 Mar 2012 14:47:00 GMT

Sir,

Alice Thomson laments the income made by landowners who host wind farms (Forget mansion tax. We need a windmill tax, 7 March). But I can reassure her that I don’t want anyone – gentry or otherwise – to be making excessive profits out of subsidies paid for by consumers. As technology costs fall, as they have for onshore wind, so will the subsidy. We’ve already proposed cutting it by 10%.

But wind energy is a valuable addition to our energy mix and Ms Thomson is wrong to prescribe a future energy mix without it.

Demand for electricity could be two-thirds higher by 2050. No-one – not DECC, Dieter Helm, or AF Consult – knows which energy source will be cheapest in ten years’ time, let alone forty.

We need an affordable energy mix: so we will let clean technologies compete on cost. It would be irresponsible to pick a winner. Our policies will create a level playing field for renewables, clean fossil fuels, and new nuclear.

Gas will only keep Britain’s energy costs down if it gets cheaper. Half of the average household bill is wholesale energy costs; global events pushed gas prices up 40% last year. Can we really afford to bet so heavily on falling commodity prices?

Onshore wind is getting cheaper: the gap between onshore wind and gas-generated electricity costs has halved in just five years. It could be cost-competitive with fossil fuels in four. Hence we propose to cut the support it receives.

Finally, the piece quotes a DECC spokesperson describing the AF Consult report as ‘shoddy nonsense’. That is rather an understatement.

Yours faithfully,

Rt Hon Edward Davey MP
Secretary of State for Energy and Climate Change
3 Whitehall Place
London SW1A 2AW

Charles Hendry on North England energy visit

Thu, 8 Mar 2012 11:07:00 GMT

Charles Hendry was in the North of England this week on a visit to Nottingham University’s Carbon Capture and Storage (CCS) research unit, the site of the future Blackburn Meadows biomass plant and the new life-expired wood energy plant in Chilton, County Durham.

The Nottingham Centre for Carbon Capture and Storage (NCCCS) is a joint venture between the British Geological Survey’s CO2 storage centre of excellence and the University of Nottingham’s CCS group.

The Minister was given a tour of the labs and met with researchers and PHD students working on CCS. He stressed that the Government is fully committed to CCS and that that £1bn in funding remains available for this new process.

He also said he was keen to forge even stronger links between the academic communities and industry on CCS to enable cost-competitive deployment of CCS in the 2020s.

From Nottingham Mr Hendry went to the site of the future Blackburn Meadows biomass plant.

Once operational in mid 2014 the £120m renewable energy plant will generate up to 30MW, enough to power 40,000 homes, by converting recycled waste wood into electricity.

The next stop on the Minister’s tour was Newcastle, where he gave the keynote address to the NOF Energy conference. His speech stressed on the importance of the supply chain to the region, and he congratulated the industry on the successful way they were seizing opportunities presented by both oil and gas and the move to the low carbon technologies.

He also engaged with some of the delegates over a roundtable discussion and met with most of the local and regional press.

The last stop was in Durham County, where the Minister visited Dalkia’s Chilton site to mark the official opening of the new life-expired wood energy plant in Chilton, County Durham.

The Chilton plant will use around 120,000 tonnes of biomass as a carbon neutral fuel each year – removing this from the waste stream and reducing the generating industry’s reliance on fossil fuels.

Mr Hendry unveiled a plaque to mark the event before being given a tour of the plant and the biomass pellet mill.

Green Deal Cash Boost

Thu, 8 Mar 2012 00:01:00 GMT

A total of £3.5million in funding has been announced today to help train hundreds of people in key green skills ahead of the launch of the Green Deal, delivering on the Deputy Prime Minister’s announcement in March last year to create 1,000 Green Deal apprenticeships.

The Green Deal is the Government’s flagship energy efficiency scheme aimed at renovating millions of draughty, energy-inefficient homes and office buildings across the UK. This scheme will begin later this year and will support an estimated 65,000 jobs by 2015.

Trained, skilled professionals in assessing home energy efficiency and installing insulation are crucial for getting the Green Deal off the ground which is why today’s money for training will go a long way to help the UK prepare for the launch.

The Department of Energy and Climate Change (DECC) has been working closely with the Green Deal Skills Alliance to ensure support goes where it is most needed. DECC is putting forward £3m and one of the leading partners in the Alliance, CITB-ConstructionSkills, will provide a further £500,000 towards the training of insulation installers.

Energy and Climate Change Secretary Edward Davey said:

“This money will help hundreds of people gear up for the Green Deal and ensure this scheme is a real success on the ground. We have worked hand in hand with industry to get this right and are targeting funding at the areas where there is an urgent need as well as a clear demand. We hope this will encourage businesses across the country to fully prepare their staff for the launch of the Green Deal later this year.”

CITB-ConstructionSkills CEO Mark Farrar said:

“Today’s announcement represents a significant step towards preparing the construction industry for the Government’s flagship efficiency scheme.

“Training shortfalls have been identified as one of the main barriers to the success of the scheme. We have invested funds to tackle training shortages and unlock commercial opportunities for SMEs and we welcome DECC’s commitment to skills and training by doing the same thing. We are now calling on employers and the supply chain to also invest in sustainable skills training for their workforce, so they too can capitalise on the Green Deal.”

In addition, DECC is also funding a £10m competition to be launched in early May to support the incorporation of innovative technologies which can achieve significant energy savings in existing non-domestic buildings. Non-domestic buildings, such as schools, shops, offices, hotels, are associated with 18% of the UK’s total carbon emissions so reducing energy demand in this sector will help the country meet its climate targets.

Notes for editors

Further messages of support for today’s training funding include:

Sarah Bentley, Asset Skills Chief Executive Designate said:

“We are delighted to be working with CITB-ConstructionSkills and SummitSkills as part of the Green Deal Skills Alliance (GDSA) to ensure the necessary skills are in place to deliver the Green Deal when it goes live later this year. Asset Skills specific responsibility is for developing the qualifications for Green Deal Advisors, who play a crucial early role in the process, and for promoting the career and training opportunities this will provide. We believe that a qualified workforce will ensure that the best advice on energy efficiency is available to householders and to business and we are delighted this support funding from DECC is available to kick start the delivery of training across England”

Neil Marshall, Chief Executive of the National Insulation Association said:

“We have been working closely with Government on plans to significantly ramp up solid wall insulation volumes under the Green Deal and ECO and identified the need for support for skills and training at an early stage. We therefore welcome DECCs commitment and the new funding that is being made available to help gear up for the launch of the Green Deal.”

Andrew Warren, Director of the Association of the Conservation of Energy said:

“Delivering the ambitious goals that the Government is targeting from the Green Deal necessitates a step change in the numbers of people employed, as well as the skills required. Whilst the energy efficiency industry has a proud track record on training, it is excellent news that the enormous size of the task before us is being recognised by the Secretary of State in such an immensely practical way.”

Mike Threadgold, Chairman of the INCA Training Committee said:

“Solid wall insulation will be central to the success of Green Deal and ECO and this funding will help to increase capacity within the industry to meet the surge in demand. SWI requires highly specialist skills and, by investing in the training and qualification of the workforce, the industry will be able to continue to deliver the highest quality standards.”

Dr Scott Steedman, Director (Designate) of Standards at BSI said:

“BSI’s Green Deal Installation Standard, PAS 2030 not only provides installers with the ability to demonstrate their competence but is designed to provide assurance for the public that the quality of work will be at the appropriate level. We were delighted to have worked with DECC in delivering the first Green Deal standard which will help encourage adoption of the scheme and the best possible result for the UK with this energy efficiency initiative.”

The Coalition announced its intention to fund up to 1000 Green Deal installer apprenticeships in March 2011, subject to demand.
The new training will be administered by the Sector Skills Councils on behalf of the Green Deal Alliance. This group is made up of several existing skills groups - Construction Skills, Asset Skills, Summit Skills.
Further details of the installer training will be available shortly on the CITB-ConstructionSkills website (www.cskills.org/cutcarbon). Media enquiries should be sent to David Wrottesley, at david.wrottesley@cskills.org or 0300 456 5453
The British Standards Institute (BSI) recently launched a new PAS 2030 standard for all installers. PAS2030 has been co-developed between DECC and industry representatives to ensure robust and deliverable standards as well as peace of mind and protection for consumers. Details of PAS2030 and how to get certified are available on the BSI website.
CITB-ConstructionSkills is the Industrial Training Board (ITB) for the construction industry in Great Britain (Scotland, England and Wales). They are working to ensure that construction employers have the right skills, in right place, at the right time by investing funds and providing a wide range of industry-led skills and training solutions. As an ITB and SSC, they are providing vital support to a sector which is central to the UK economy. For more details on their work please visit the construction skills website.
Cut the Carbon campaign: in partnership with the Federation of Master Builders and National Specialist Contractors Council, ConstructionSkills launched an industry-wide ‘Cut the Carbon’ campaign across England, Scotland and Wales in October 2010; to raise construction companies’ awareness of the legislation, the timelines and practical support and training available in responding to the Green Deal. Visit the Cut Carbon Campaign website for more information.
DECC will provide £10m innovation funding for the application of pre-commercial technologies which can achieve significant energy savings in existing non domestic buildings. This programme will be delivered in partnership with the Technology Strategy Board. Details of how to apply will appear on DECC and TSB’s respective websites by early May. Innovative solutions will be encouraged from consortia of key supply chain players, including building owners and technology suppliers, to demonstrate the energy performance of innovative products or processes which could ultimately be accredited under the Green Deal.

Publication of EU ETS auction schedule for May - July 2012

Wed, 7 Mar 2012 09:55:00 GMT

The UK Government today published the schedule for EU ETS auctions to take place between May and July this year.

The Government will auction 12 million allowances over this period, using surplus allowances from the UK Phase II New Entrant Reserve (NER).

The full schedule is available on the UK Debt Management Office’s website below.

Further information

Statistical release: Estimates of home insulation levels in Great Britain: January 2012

Wed, 7 Mar 2012 09:42:00 GMT

It is estimated that at the start of January 2012:

There are 26.7 million homes in Great Britain. Of these 23.3 million have lofts, 18.9 million have cavity walls with the remaining 7.8 million having solid walls.
Through Government schemes since April 2008 (the start of CERT), there have been 3.8 million lofts insulated, 2.0 million cavity walls insulated and 58,000 solid walls insulated.
Compared with October 2011, 370,000 more properties had loft insulation, 160,000 more had cavity wall insulation and 6,000 more had solid wall insulation.
14.1 million homes had loft insulation of at least 125mm (60 per cent of homes with lofts).
11.2 million homes had cavity wall insulation (59 per cent of homes with cavity walls)
122,000 homes had solid wall insulation (2 per cent of homes with solid walls).

Edward Davey sees wave power in action

Tue, 6 Mar 2012 10:53:00 GMT

Secretary of State Edward Davey visited Inverness, Scotland on Saturday for a roundtable discussion on Scottish renewable energy.

The conference was a good way for him to meet some of DECC’s key Scottish stakeholders, and to discuss areas of the department’s agenda such as Electricity Market Reform (EMR) and ProjectTransmit.

The Secretary of State then went to visit Wavegen (pictured), a wave energy company based in Inverness. Wavegen was the first company in the world to connect a commercial scale wave energy device (LIMPET) to the grid on the Scottish island of Islay. The LIMPET (Land Installed Marine Powered Energy Transformer) is a shoreline device which produces power from an oscillating water column.

On 17 November 2011, Wavegen also put into operation the world's first commercial full life Limpet wave power plant.

During the Wavegen visit the Secretary of State was given a demonstration of the wavetank in operation, followed with a presentation of the various models they currently have on the Limpet plant and the Mutriku plant in Spain.

Keeping the lights on - letter from Edward Davey to the Telegraph

Mon, 5 Mar 2012 09:53:00 GMT

03 March 2012

SIR – Diversity is the key to our future energy security (“Shale gas boom may cost billions”, report, February 24). With output from the North Sea in decline, we are now a net importer of gas, making us more vulnerable to volatile world gas prices.

Gas will remain a vital part of our energy portfolio, but the Government is determined to reduce our dependence on expensive imports and to expand Britain’s energy mix to include new nuclear and renewable energy and carbon capture and storage. The alternative would be a gamble on world gas prices falling in the future.

Shale gas may prove a worthwhile resource for the UK, but it is in its infancy. With a fifth of our generating capacity set to close over the next decade as old power stations shut down, a balanced approach is our best policy for keeping the lights on.

Even if future wholesale gas prices are much lower than most analysts expect, our proposals to reform the electricity market and revolutionise the energy efficiency of our homes will deliver the best deal for Britain and for consumers while making sure we have the energy supplies we need.

Edward Davey MP (Lib Dem)
Secretary of State for Energy and Climate Change
London SW1

Letters, the Telegraph

New nuclear will learn lessons from past mistakes - Davey

Thu, 1 Mar 2012 17:41:00 GMT

Energy Secretary Edward Davey today underlined the Government’s commitment to deal with the UK’s nuclear legacy and to ensure that the nuclear new build programme learns every lesson from past mistakes.

He said policies to ensure new nuclear operators cover their waste and decommissioning costs will mean that future generations do not pay the price for nuclear electricity used decades before they were even born.

This came as the Government published a report by Professor Gordon MacKerron of SPRU (Science and Technology Policy Research), University of Sussex, into the history of managing nuclear wastes and decommissioning.

The report said:

Delays by governments and public bodies in tackling nuclear liabilities led to a progressive escalation of costs and deterioration in facilities, which has only begun to be addressed in recent years. The problem was compounded by the military and research origins of the nuclear industry.
Government has learned important lessons from this history: in the creation and funding of the Nuclear Decommissioning Authority to deal with the legacy, the Nuclear Liabilities Fund for the reactors run by British Energy and in the legal framework that has been put in place for liabilities resulting from any new nuclear build.
The military origins of the post-war UK nuclear industry led to the early civilian nuclear programme of gas-cooled reactors, which are inherently more complex and expensive to decommission than light water reactors. The choice of second generation advanced gas-cooled reactors, made on the basis of conflicted advice, compounded the effects, and the commitment to reprocessing spent fuel added further to costs.
Little or no thought was given to decommissioning facilities at end of life. The organisations which owned them had other objectives, either the pursuit of research into new nuclear technologies or the pursuit of profitability. Although the prospect of electricity privatisation in the late 1980s focused attention on the costs of the legacy, the opportunity was not taken to address it properly.
The 2002 White Paper which led to the creation of the Nuclear Decommissioning Authority (NDA) marked a turning point. Government is now committed to long term planning to deal with the nuclear legacy and has put in place structures to do so that are clearly superior to those that came before.
Spending on nuclear decommissioning, which is ring-fenced within DECC’s budget has increased significantly and spending on the highest priorities is protected.

Commenting on the report, Mr Davey said: “Professor MacKerron’s report is a valuable contribution to an important debate. It paints a warts and all picture of the UK’s nuclear history, and explains why we have such a difficult legacy of old facilities and waste to manage.

“It also shows that in the last few years, government and industry has been getting their house in order. The Coalition has made cleaning up and decommissioning the nuclear legacy a priority– even at a time when it faces difficult spending decisions.

“It’s hard to imagine a starker salutary lesson. The public purse is now picking up the tab for previous mistakes. This kind of short-sightedness cannot and will not be allowed to happen again. We will not place a costly new millstone around the neck of future generations.

“The coalition wants to see new nuclear power come forward as part of a balanced energy mix. It is secure, low carbon and will support thousands of jobs in construction and operation. But there will be no subsidy, operators will be required to put money aside from day one to meet future clean up and waste costs and we intend to substantially increase operators’ third party liabilities.”

Professor Gordon MacKerron said: “The history of managing and funding our nuclear legacy has, until very recently, been dire. Funds collected from consumers for decommissioning and waste management were diverted to other ends. And for decades minimal attention was paid to deteriorating nuclear facilities - and the cost of remediating them is consequently now much higher, probably by several billion pounds, than it would have been had serious work started up to two decades ago. Continuing commitment to separating plutonium from spent fuel, long after any economic justification had ceased, compounded the problem.

“The establishment of the NDA in 2005 was a substantial step forward – for the first time a single body focussed entirely on managing the nuclear legacy. Unsurprisingly this has led to the discovery that the (discounted) costs of managing our nuclear liabilities will be over £20 bn. more as at 2011 than expected in 2005. And there are indications that, when affordable, speeding up the work of remediation may offer good value for money. Government has learned lessons from history and the funding regimes for the UK’s current reactors, as well as any future reactors, are much more robust.”

Notes for editors:

1. The report by Professor Gordon MacKerron is available to read on the DECC website

2. Professor Gordon MacKerron is an economist and Director of SPRU (Science and Technology Policy Research) University of Sussex. He has worked in consultancy and Government as well as academia, specialising in economic and political issues of energy, climate change and nuclear power. Between 2003 and 2007 he chaired the Government’s independent Committee on Radioactive Waste Management (CoRWM), responsible for formulating and recommending a new approach to UK policy for the management of higher activity nuclear wastes. To speak to Professor MacKerron please contact the University of Sussex press office on 01273 678209.

3. The Government legislated in the Energy Act 2008 to ensure that operators of new nuclear power stations will have secure financing arrangements in place to meet the full costs of decommissioning and their full share of waste management and disposal costs. Before construction begins, an operator of a new nuclear power station will have to submit a Funded Decommissioning Programme (FDP) for approval by the Secretary of State. In 2009 the Government has established the Nuclear Liabilities Financing Assurance Board (NLFAB) to provide impartial scrutiny and advice on the suitability of FDPs submitted by prospective new nuclear operators. The Board will advise the Secretary of State on the financial arrangements that operators submit for approval. In a further strengthening of the arrangements for scrutiny and advice on FDPs, the Nuclear Decommissioning Authority has now been appointed to act as expert adviser to the Secretary of State on technical issues.

4. The Nuclear Decommissioning Authority (NDA) is a non-departmental public body created through the Energy Act 2004. Its purpose is to deliver the decommissioning and clean-up of the UK's civil nuclear legacy in a safe and cost-effective manner, and where possible to accelerate programmes of work that reduce hazard. For more information visit the NDA website.

5 The Government issued a public consultation in January 2011 on its proposals to implement the revised Paris and Brussels Conventions on nuclear third party liability. Among other aims, the Conventions set out a framework for enabling victims to claim compensation for damage caused after a nuclear incident. The consultation has now closed and we intend to publish the Government response shortly

UK issues its first free EU ETS allowances to aircraft operators

Thu, 1 Mar 2012 09:41:00 GMT

01 March 2012

The UK was the first country out of all the Member States to start issuing its aviation allowances. The first free allowances were allocated on Tuesday 28 February.

These were issued to those aircraft operators covered by the EU ETS that had completed the registry account opening process and therefore were able to receive their allowances for 2012.

A total of 4,965,892 allowances have been issued to 3 of the airlines that the UK regulates. A full list of those airlines that the UK regulates is available on our website.

There is nothing holding up the issuing of free allowances, as soon as aircraft operators complete the registry account opening process, they will be able to receive their allowances.

The total number of allowances that the UK is expected to allocate in 2012 is 56,737,146.

The UK will continue to issue allowances to those aircraft operators that open their registry accounts. This allocation will be in accordance with the free allocation information available on the EU ETS aviation pages of our website.

We are still checking any commercial confidentiality issues with the Environment Agency before releasing the names of the companies that received their allowances”.

The EU ETS is one of the key policies introduced by the European Union to help meet its targets to reduce emissions of greenhouse gases. The EU ETS sets an overall cap on the total emissions allowed from all installations covered by the system, which are then converted into allowances, a proportion of the total number of allocations are distributed for free. From 1st January 2012, aviation was included within the EU ETS, meaning that any airline flying in to or from an EU airport will have to monitor and report their emissions and surrender allowances equivalent to these emissions.

Find out more about the EU ETS

Reappointment of the members of the Nuclear Liabilities Financing Assurance Board

Thu, 1 Mar 2012 08:57:00 GMT

01 March 2012

Members of the Nuclear Liabilities Financing Assurance Board (NLFAB) today took up their three-year re-appointments.

The role of the NLFAB is to provide independent advice to the Secretary of State on the robustness of the financial arrangements that operators of new nuclear power stations need to have in place to meet the full costs of decommissioning and their full share of waste management and disposal costs.

Charles Hendry, Minister of State for Energy, has approved the reappointments of:

Anne Baldock, Head of Allen & Overy LLP’s Projects, Allen & Overy LLP
Antony Osborn-Barker, Director, JLT Pension Capital Strategies
Norman Harrison, Director of Strategic Development, Babcock International
Simon O’Regan, President of Mercer’s Global Retirement, Risk and Finance business
Dr Anthony White, MBE, non-Executive Director, Senior Adviser on Climate Change, UK Energy Research Centre and Sussex University’s Energy Group
Simon Carroll, Regulator, Swedish Radiation Safety Authority, Stockholm

The members have been reappointed for three years from 1 March 2012 to 28 February 2015.

Notes for editors:

The NLFAB is an independent advisory non-departmental public body set up to provide advice to the DECC Secretary of State on the suitability of the FDP (Funded Decommissioning Programme). It consists of a Chair and six members. The NLFAB members were appointed on 1 March 2009 for three years. Their current term will expire on 29 February 2012.
This is a part time appointment based on an average of six Board meetings a year. The remuneration is £500 per day.
Appointments to the NLFAB are made in accordance with the requirements of the Code of the Commissioner for Public Appointments. All appointments are made on merit and political activity plays no part in the selection process. In accordance with the Nolan recommendations, there is a requirement for appointees’ political activity to be made public. None of the appointees have declared any political activity or hold other public office except for Norman Harrison who holds one other Ministerial appointment: Trustee and Director of the Nuclear Liabilities Fund.
Further information about the NLFAB can be viewed on the DECC website.
Further information about Funded Decommissioning Programmes can be viewed on the DECC website.

Offshore wind co-ordination could save up to £3.5 BN

Thu, 1 Mar 2012 08:44:00 GMT

Energy regulator Ofgem and the Department of Energy and Climate Change (DECC) have today published a report showing how more co-ordination in the development of offshore links and infrastructure can be achieved. In tandem, Ofgem has launched a consultation on potential changes to the regulatory regime for offshore transmission assets to take some of this work forward.

The Government’s Renewable Energy Roadmap suggests that by 2020, between 11 and 18GW of wind farm capacity could be built off Britain’s coast, compared to 1.6GW now. Future wind farms will be substantially larger and further offshore than existing projects. Instead of building individual connections for each development, they could be interlinked to lower the overall construction and operating costs. This would mean the offshore network could grow incrementally and efficiently.

This coordinated approach could reduce the cost of offshore connections by 8-15% (£0.5-3.5 billion – see notes to editors point 4). This would help meet the Government’s target of reducing the cost of offshore wind to £100 per mega watt hour (MWh) by 2020. It could also pave the way for an offshore network in the North Sea linking wind farms off Britain’s coast to other European countries.

Robert Hull, Managing Director, Commercial, Ofgem E-Serve, said: “Competitive tendering for the ownership of offshore power links is attracting new investment into the GB energy sector and saving customers money. We want to continue making savings, which is why coordinating links, where this can increase efficiency, is so important. We consider we can do this in a way that protects customers while providing stability and certainty for wind farm investors and prospective offshore transmission owners.”

Charles Hendry, Minister of State for Energy, said: “There are a number of ways we can reduce the cost of offshore wind, and this is definitely one of the most exciting.

“Linking up power cables between offshore wind farms could make some serious savings, so we would be crazy not to encourage it. These cables could even be linked up to European projects, increasing opportunities for trading electricity.
“I now look forward to seeing the package of measures announced today implemented, and to see them build on the cost savings already being made through bringing in competition and new entrants into this sector.”

Guy Nicholson of RenewableUK said: “We welcome DECC and Ofgem’s work on coordination and Ofgem’s consultation. Early investment in planning, developing, permitting and constructing offshore transmission will help to deliver networks in the most cost effective manner. As well as connecting the 18GW of offshore wind generation RenewableUK expects to be operating by 2020, the offshore transmission regime can help reduce timescales and costs for both onshore reinforcements and interconnection with the rest of Europe.”

The measures announced today are intended to clarify how co-ordination can be achieved. Ofgem would assess whether anticipatory investment is beneficial to the development of an efficient network. Approval would also depend on other factors. For example, developers and the system operator would have to show that there is demand for capacity to be built, and that there is a robust benefits case for customers.
In time, these changes could potentially be adapted to also help the development of a European offshore network if this does materialise.

Note to Editors

1. Conclusion report and consultation document

2. What is the Offshore Transmission Owner (OFTO) regime?

The offshore regulatory regime was developed by Government and Ofgem and was launched in 2009. The regime is for licensing offshore electricity transmission and uses competitive tendering to ensure the cable connections are delivered on time and at a reasonable cost. It is the first time that Ofgem has used competitive tendering in this way. The first phase of the project involves two transitional tender rounds and opens the way for transmission licensees to own and operate transmission assets for offshore renewable projects which have been or are being constructed by the offshore generator. At a later stage, tenders will be undertaken under an enduring regulatory regime which will enable Ofgem to run transmission investment tenders that allow for either:

OFTOs to design, build, operate and maintain the transmission assets; or
Generators to build the transmission assets and then transfer to OFTOs under completion of construction.

The generator would specify which option it wanted to pursue. The conclusions published today relate to improving coordination under the enduring regime. This is because the transitional tender rounds concern links which are either complete, or in more advanced stages of construction. These earlier projects have been smaller and nearer to shore, meaning that for most the efficient way for them to be connected has been through individual links to the onshore network.

3. Who decides on whether anticipatory investment can take place?

Anticipatory investment can and already has been occurring under the OFTO regime, but industry participants have suggested that there is a need for greater clarity on the framework for such investment. As a result, Ofgem has set out in its consultation document initial proposals for an approach to anticipatory investment in offshore transmission infrastructure. This proposes that offshore generators, National Grid (as system operator) and local transmission owners could have a role in identifying where anticipatory investment could support the development of an economic and efficient network. It also puts forward a possible process where Ofgem could provide an earlier assessment of whether it would be economic and efficient to include anticipatory investment within the scope of works. Under these proposed measures, a key factor in Ofgem’s assessment would be whether or not undertaking the proposed Anticipatory Investment would be in the interest of consumers.

4. Reducing the cost of offshore wind

The Department for Energy and Climate Change has a vision to reduce the cost of offshore wind to £100/MWh by 2020. More information is available in DECC's Renewable Energy Roadmap document:

The cost savings identified are outlined in consultants’ reports commissioned by Ofgem. TNEI/PPA Energy assessed possible cost-effective network configurations and investments required to connect offshore generation to the National Electricity Transmission System. Redpoint Energy carried out a review of the current policy and regulatory framework and commercial incentives to understand where there may be inadequate incentives for, or barriers to, coordination. The estimated cost savings of 8-15% are relative to a total estimated baseline of £6-24 billion. This is the cost of connecting and operating the new links out to 2030 across the range of offshore generation scenarios considered. The reports can be found on the Ofgem website

5. About Ofgem

Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's powers and duties are largely provided for in statute, principally the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Energy Act 2004 as well as arising from directly effective European Community legislation.

For further media information contact: Chris Lock 020 7901 7225

Greg Barker's speech at the BPF Annual Residential Conference

Wed, 29 Feb 2012 14:15:00 GMT

Thank you for the invitation. I’m delighted to be here at the British Property Federation’s Annual Residential Conference.

I’m pleased to see sustainability on your packed agenda for the day, alongside discussions on investment and the future of the residential property sector.

As you may know, the Coalition has pledged to be the Greenest Government ever. At the heart of this pledge is energy efficiency.

Indeed, in a world of increasing energy prices, market volatility and reliance on imports, energy efficiency has never been more important.

That’s why we are creating the framework for the Green Deal. It is our way of helping homeowners, landlords and tenants get home improvements like loft insulation, boilers and double glazing at no upfront cost.

Today, I wanted to draw out three key points to unpack that simple description:

Firstly, this is a new way of approaching energy efficiency.
Secondly, it will create a brand new market.
Thirdly, the power of communities will be at the heart of in delivering this agenda

But first, to give some more context.

Here in the UK, We have some of the worst performing buildings in Europe. More than half of our homes don’t have sufficient insulation. They leak heat like a sieve.

The UK building stock was responsible for 43% of total UK emissions in 2009.

And despite the relatively mild winter we are coming through, increasing numbers of families are struggling to pay their energy bills and have been hit by rising energy prices over recent years. We estimate that this year up to 4.1m households will be in fuel poverty in England alone.

Energy efficiency can help tackle each of these challenges. It is a win-win-win scenario: reduce emissions, save money and create opportunities for business.

Loft to living room

The Green Deal is a different approach to energy efficiency. It places consumers at the centre of the policy. It isn’t about stop start Government driven and owned programme of works. It is about consumers driving demand and a competitive market responding.

We’re also ensuring through the new Energy Company Obligation that support is provided to tackle fuel poverty and for those needing the most expensive measures such as solid wall insulation.

We want to take energy efficiency from the image of dirty, dusty loft insulation to cosy living rooms and beautiful houses. From loft to living room and boring to bling.

No longer will every discussion of energy efficiency require the obligatory a picture of a hearty workman in a face mask cheerfully laying another roll of loft insulation in some cramped dusty loft.

Backed with strong consumer protection, we are providing people with opportunities for investing in their home – and let’s face it, people are always looking to improve their homes, even in times of austerity.

Perhaps the tangible benefits energy efficiency treatments can bring, is best illustrated by some pictures. Taking a leaf from the many home improvement shows and magazines - here are some before and after pictures.

See before and after pictures on flickr

This improvement is a result of a partnership between British Gas, Walsall Housing Group and Walsall Council in the West Midlands, under the Community Energy Saving Programme (CESP).

This is an excellent example of a mixed tenure project. It has delivered a comprehensive range of measures including boiler replacement, loft insulation, energy advice and - as the photos show - external solid wall insulation.

The solid wall insulation has drastically improved the appearance of the properties, improved the energy efficiency and in a number of cases tackled a damp problem on exterior walls. Treating properties on this street by street approach has also helped to considerably improve the local environment and made the area a better place to live.

To give a second example, I had the pleasure of visiting Salford last year, including a tour of homes installed with external solid wall insulation.

Homes on the Regent Park estate were built in the 1970s, timber framed with no wall insulation.

As they had a traditional brick appearance, residents were keen to keep the look. This was something they achieved with a brick effect render on top of the insulation. Here is a happy resident, talking me through the finished effect.

See pictures on flickr

Energy efficiency aside, this has clear kerb appeal too.

I am also aware of an innovative scheme in Stockton where a partnership of the local council and Eggborough Power are aiming to provide solid wall insulation and other measures to at least six hundred mainly private homes in the town centre. Many of these homes were previously scheduled for demolition.

They are largely good solid Victorian terraces which have served well for over a hundred years, but they can be cold and crippling expensive to heat for those on low incomes.

However, with these energy efficiency improvements they are now being given a new lease of life, as has the whole local community. And there is no reason to believe they should not be providing warm and cosy accommodation for the next hundred years.

So I think it important to recognise that the drive energy efficiency is not just about saving carbon, important though that is. It is also about providing people with homes they are happy to live in.

Market making

But this isn’t just good for the consumer. It is also good for economic growth. There is a massive new market opportunity for businesses and industry.

Our estimates suggest the Green Deal could support up to 65,000 jobs by 2015. And we are talking about billions of pounds worth of investment.

In this way, the Green Deal is as much a part of our growth agenda as it is a part of our climate change policy.

Government is creating the legal framework but we aren’t prescribing a single business model. Our intention is for this to be a new, open and dynamic market that will drive innovation.

And to help this newly forming market in its early days, we have announced a £200m injection of Government funding to provide a time limited introductory offer. It demonstrates that we are serious about hitting the ground running.

To help ensure the best deal for consumers, we wanted to encourage a wide variety of different businesses – large and small – local authorities, social housing providers and third sector organisations to play a role in this new market.

And I’m pleased to say that there are a number of organisations looking to enter the market with a variety of different business models. These models include - but are by no means restricted to - keeping all the functions in house, out sourcing the supply chain and working in partnership with SMEs.

We have been having conversations with these organisations from the outset, but the tone is changing. We are moving from theory to practice.

As the landlords, owners, investors and developers of what must be collectively an impressive property portfolio, I would encourage you to consider your role.

Power of communities

Strong local participation will also be key to rolling out the Green Deal.

This Government is passionate about giving more power and responsibility to local people, neighbourhoods and communities to create better local services and outcomes. It is the Big Society.

And the Green Deal offers opportunities for Big Society style collaborations working with and through a range of partnerships according to local needs.

Landlords – both private and social - could all have an important role to play here, alongside Local Authorities and Community Organisations.

These organisations will know the needs and wants in their local areas. They will also be able to foster local economic development including supporting the maintenance and generation of local jobs and skills.

There is already evidence that communities are responding. Our £10 million Local Energy Assessment Fund is helping local communities come forward with their plans and preparation for the Green Deal.

From the London Borough of Merton’s local champions producing a list of households ready for a Green Deal advisor visit to Warwickshire’s ‘carbon dating’ matching interested consumers with an open home demonstrating the results.

And from Brighton’s ‘go early’ Green Deal pilots to Church Stretton in Shropshire installing solid wall insulation in their Town Council offices.

This is just a sample. There are over 200 more inspirational examples of how local communities are gearing up for increased energy efficiency and renewable energy generation through the LEAF fund.

Next Steps

In terms of next steps, the Green Deal framework is now receiving its final touches.

The primary legislation to make the Green Deal a reality is already on the statute books. And we are currently finalising the secondary legislation following our public consultation.

Throughout this process stakeholders have been advising us on how to shape the framework to work with the grain of business whilst offering robust consumer protection.

I would like to thank the British Property Federation, and your members, for your input and support to-date in helping to create this framework.

And I hope it doesn’t stop there. As we enter the final stretch in the lead up to launch, I look forward to further collaboration to help make this market a success.

Case study: The Big Energy Upgrade

Wed, 29 Feb 2012 10:57:00 GMT

The BIG Energy Upgrade Programme is the first large scale project that is delivering installation of energy efficiency measures and renewables to houses in Yorkshire and the Humber by adopting a whole house/ whole community approach. The results of this programme have particular relevance to the forthcoming Green Deal as the project includes:

114 job created and 99 jobs safeguarded; 145,113 tCO2 saved
extensive use of external solid wall insulation (relevant for the delivery of ECO initiative)
stimulate the energy efficient supply chain
behavioural studies (from individual to whole community)
area based delivery of retrofit measures

Led by Kirklees Council, the partnership includes

6 Local Authorities
4 Arms Length Management Organisations (ALMOs)
2 Social Housing Providers,
Yorkshire Energy Services
The University of Sheffield.

£14.9m is being invested of which £7m is from the European Union, European Regional Development Fund (ERDF) as part of Europe´s support for the region´s economic development through the Yorkshire and Humber 2007-2013 ERDF Programme.

The project will deliver a very ambitious programme of installation of energy efficiency measures and micro generation technologies in households by adopting a fully integrated, whole-house/ whole community approach.

Through individual household assessments carried out by YES the project will identify a highly individual package of measures for each of the households and will provide optimal insulation and energy control to the house. The project will also work with communities to embed behaviour change around energy consumption.

A multidisciplinary team of academics from the University of Sheffield is working alongside 14 partners involved in delivering the project through an integrated approach which will for the first time understand the interrelated areas of human-behaviour, energy-efficiency technology, and supply-chain capabilities. Primary data is being gathered on the performance of the measures installed, the behaviour of those living in the houses and the development of the regional supply chains. The holistic understanding of these enables design of more effective policies and interventions.

Oldbury Power Station shuts down after four decades of safe generation

Wed, 29 Feb 2012 09:45:00 GMT

29 February 2012

The world’s oldest operating nuclear power station, Oldbury near Bristol, finally stopped producing electricity today, after 44 years of safe generation.

Since it opened in 1967, Oldbury’s twin reactors have generated 137.5 TWh of electricity: enough to power one million home for over 20 years.

The closure marks the start of a new phase in the site’s life as preparations get under way to start the decommissioning process, which will, over the decades to come, include removal of the spent fuel, management of the waste and eventual demolition of the buildings.

Reactor One’s shut-down today follows the closure last June of Reactor Two. Originally scheduled to stop generating in 2008, the site’s owner, the Nuclear Decommissioning Authority (NDA), took the decision to extend Oldbury’s operating life following reviews with the regulators. The site is operated by Magnox Ltd, which is owned by EnergySolutions.

Oldbury is one of 11 nuclear power stations in the UK that were based on the pioneering Magnox design, developed during the post-war years and the first in the world to generate electricity on a commercial scale. Ten are now closed and in various stages of decommissioning, with only Wylfa on Anglesey still operating.

Oldbury and Wylfa are both named as potential sites for new reactors in the Government’s Nuclear National Policy Statement. The Horizon consortium has said that it intends to build at least 6GW of new nuclear capacity at those sites, providing a real sense of optimism for the future of nuclear in both Gloucestershire and North Wales.

Charles Hendry, Minister of State for Energy, said:

"Oldbury has been producing low carbon power for four decades now, making a significant contribution to meeting the UK’s electricity demand. Plans for a new nuclear power station adjacent to the current site are an encouraging sign that Oldbury will play a role in our energy future too.

“The safe operation of the plant is a testament to the hard work of its staff. As attention turns to the decommissioning and clean-up of the site, it will continue to remain a vital source of employment in the local area.”

Oldbury was the first nuclear site to have a concrete pressure vessel and is the world’s oldest operating nuclear reactor. During its lifetime, Oldbury has starred in several television shows, including Doctor Who and Blake 7, and even featured on Top of the Pops when the group Slade recorded a performance for the show on the pile cap.

Gearbox engineering company wins cash to accelerate offshore wind innovation

Tue, 28 Feb 2012 16:00:00 GMT

A world-leading gear engineering and manufacturing company has been confirmed as the first successful bidder to a major Government scheme to support manufacturers developing next generation offshore wind technology. David Brown Gear Systems (David Brown), whose UK facility is in Huddersfield, Yorkshire, has been awarded a £1.2m grant to help develop its 7MW offshore wind turbine gearbox.

David Brown’s innovative technology will be used for Samsung Heavy Industries’ new turbine. The gearbox, through its low weight and compact design, can improve cost of ownership and ultimately lower the cost of energy for wind turbine operators.

It is the first company to be awarded funding under DECC and the Technology Strategy Board’s Offshore Wind Component Technologies Innovation scheme which is worth around £5m. Launched last November, the scheme aims to help innovators with novel ideas to reduce the cost of offshore wind energy.

Energy and Climate Change Minister Greg Barker said:

“The coalition is determined to drive ambitious green growth and this is putting our money where our mouth is. This cash shows we are really shifting gear when it comes to supporting innovation and offshore wind. Making wind turbines more efficient is common sense and will help bring down the costs making them more attractive to build and helping us increase the amount of electricity we get from clean, green sources. It’s great to see David Brown Gear Systems stepping up to the challenge to ensure wind turbines work in the most efficient way.”

Ian Farquhar, Managing Director Wind Energy, David Brown Gear Systems said:

“We are delighted to have been awarded funding from the Offshore Wind Components Technologies Innovation scheme to help develop a wind turbine gearbox which aims to reduce the cost of energy for wind turbine operators by as much as 5%. At David Brown we strive to be leaders in the gearing technologies of tomorrow and this grant will allow us to reduce the financial risk of bringing a beneficial product to market. This is a major boost to both David Brown and the UK supply chain, not only in terms of immediate supply partners but additionally, the wider opportunities that will develop as a result.”

This marks the first round of funding under the Offshore Wind Components Technologies Innovation scheme, further winners will be announced shortly and a second call for ideas will be launched in spring this year.

In addition, the Government’s Low Carbon Innovation Co-ordination Group has today published an analysis of the priority areas for innovation support in offshore wind, the findings of which underpin the design of DECC’s Offshore Wind Innovation Scheme. The Technology Innovation Needs Assessment (TINA) Summary Report shows that offshore wind has tremendous potential to reduce the UK’s reliance on imported fossil fuels and help meet renewables and carbon reduction targets. It also highlights the importance of innovation for cutting the cost of offshore wind and delivering benefits to the UK economy.

This is the first TINA Summary Report to be published. TINAs for other technology areas are being finalised and are expected to be published over the next few months

Notes for Editors

David Brown is a global company that began business in Huddersfield more than 150 years ago. David Brown recently announced it has been granted planning permission to build a world-class wind turbine gearbox research and innovation centre and centre of excellence for gear manufacture in Mirfield, Yorkshire. The new state-of-the-art facility signifies a key stage in David Brown’s UK offshore wind supply chain strategy and will supply components to planned coastal assembly facilities. For further information on David Brown please contact Toni Jackson, Communications Director: +44 (0) 7702202734
The Spending Review of November 2010 announced DECC Capital funding of over £200m for low carbon technologies over four financial years, from April 2011. This includes up to £60m for the development of offshore wind manufacturing at port sites. The remaining capital funding will support innovation in low carbon technologies and systems
From that budget, DECC announced the allocation of up to £30million for offshore wind innovation projects in July 2011, with £15million of that fund allocated to the Offshore Wind Component Technologies Demonstration and Development Scheme. The first call for proposals under this scheme was launched on 21 November 2011.
The DECC and Technology Strategy Board’s Offshore Wind Component Technologies Innovation Scheme is one part of a portfolio of support to innovation in Offshore Wind coordinated by members of the Low Carbon Innovation Co-ordination Group (LCICG). That support aims to reduce costs and to maximise the benefits of Offshore Wind to the UK economy.
The Government’s Low Carbon Innovation Co-ordination Group brings together the major public-sector backed funders of low carbon innovation in the UK to work together to coordinate their activities and to maximise the impact of government investment in innovation. Its core members include DECC, BIS, Carbon Trust, Energy Technologies Institute, Technology Strategy Board and the Engineering and Physical Sciences Research Council. The Scottish Government and Scottish Enterprise have recently joined the core group and several other organisations, included the other Devolved Administrations, are represented as associate members. Senior level meetings of the group are chaired jointly by the DECC Minister Greg Barker and the BIS Minister David Willetts.
The LCICG’s Technology Innovation Needs Assessment (TINA) Project is collaborative effort involving all members of the LCICG group and aims to identify and value the key innovation needs of specific low carbon technology families, in order to inform the prioritisation of public sector investment in low carbon innovation.
Further details of the TINA Project and copies of the Offshore Wind TINA Summary Report can be found on the websites of the LCICG’s members, including on DECC’s website.

UK and Bangladesh to collaborate on energy research

Tue, 28 Feb 2012 11:36:00 GMT

DECC, the Engineering and Physical Sciences Research Council (EPSRC) and the Government of Bangladesh have signed a Memorandum of Understanding on Energy Research today.

Under the Memorandum of Understanding (MoU) internationally renowned UK universities and institutes will partner with colleagues in Bangladesh to develop research projects on renewable energy, and work relating to energy technologies, systems, services and policies.

Energy and Climate Change Minister Greg Barker said:

“International collaboration on research is vital to make renewable energy viable for developing countries and help tackle climate change. Through the Memorandum of Understanding, not only can we offer our world-leading expertise in sustainable energy solutions but we can also learn valuable lessons from countries that are undergoing rapid change.”

Professor David Delpy, CEO of EPSRC, said:

“This MOU presents a fantastic opportunity for leading researchers in the UK and Bangladesh to work together to tackle this global issue, and this cooperative approach will enhance the impact of UK energy research.”

Andree Carter, Director of UKCDS, said:

“This is a really important milestone for scientific collaboration between the UK and Bangladesh. UK scientists are really looking forward to working with those in Bangladesh to build stronger relationships which can help address low carbon science and engineering challenges. The MoU is an excellent model for future collaborations with Bangladesh and other countries in the world.”

Access to energy services is a pre-condition for development. Bangladesh despite its vulnerability to climate change, has been experiencing sustained economic growth for more than a decade. It now faces big choices on the kind of energy infrastructure that it should develop to meet its ever increasing energy needs.

For Bangladesh to make those choices, it needs high quality research and development into energy systems and their interactions with society.

Notes for editors

Cooperation on science and technology between developed and developing countries is recognised by the international community as a key action for reducing greenhouse gas emissions whilst enabling sustainable development
The UK energy research is internationally recognised for its excellence. The UK energy research community has a great deal to offer in terms of world class expertise on renewable energy technologies.
This initiative will facilitate the building of relationships and partnerships between UK and Bangladeshi scientists, engineers and policy makers and help achieve transition to climate resilient, low carbon economy.
EPSRC will issue a call in the summer for collaborative research projects on low carbon energy for development and expects to support research proposals under this MoU.
UK Collaborative on Development Sciences (UKCDS) brings together 13 UK funders and stakeholders with an interest in international development research. Under its auspices, research funders and policy makers from across government and science disciplines work together to

Provide a more coordinated approach to development sciences research
Maximise the impact of UK research funding on international development outcomes

Charles Hendry's speech to the Platts 6th Annual CCS Conference

Mon, 27 Feb 2012 17:50:00 GMT

At the outset I would like to emphasise the UK Government’s firm commitment to Carbon Capture and Storage (CCS) and our determination to see the technology ready to be commercially deployed in the 2020s. CCS has the potential to be one of the most cost effective technologies for decarbonisation of our power and industrial sectors.

You will all no doubt be aware of this, but I think it is important to reiterate why CCS is so important. Studies undertaken by the International Energy Agency (IEA) on behalf of the G8 have concluded that, to achieve a 50% reduction in global carbon emissions by 2050 cost effectively, CCS will be needed to deliver about a fifth of this target. Without CCS the delivery cost of meeting a 50% global reduction target by 2050 will be 70% higher. And action on CCS in Europe will be instrumental in helping to drive ambitious international action on climate change, particularly with major economies such as the US, India and China that are heavily dependent on fossil fuels.

CCS provides us with a generation option that other technologies do not – a flexible low carbon electricity source that can provide a balance between the intermittency associated with renewables and the baseload nature of nuclear. It allows fossil fuels to play a full part in our low carbon future and allows the decarbonisation of industrial emissions.

To achieve its potential CCS must be cost competitive with other low carbon technologies and carbon abatement approaches. In the power sector that means that plants with CCS need to be able to compete with nuclear and renewable technologies. In the industrial sector CCS must provide a cost effective means to deal with carbon emissions from processes where there are no other options.

There are three challenges which we believe must be tackled to enable commercial deployment of CCS:

Reducing the costs and risks associated with CCS so that it is cost-competitive with other low carbon technologies;
Putting in place the market frameworks that will enable CCS to be deployed by the private sector cost effectively; and
Removing key barriers to the deployment of CCS.

UK Government commitment to CCS

To address these challenges the UK Government is taking forward a programme of interventions which is one of the most comprehensive offered by any country in the world to support the development of CCS. The programme includes:

A CCS Delivery Programme with £1bn in capital funding to support a portfolio of commercially-focused CCS projects, targeted specifically to learn by doing and to share resulting knowledge to reduce the cost of CCS such that it can be commercially deployed in the 2020s.
A £125m, 4-year, co-ordinated innovation programme covering fundamental research and applied research and innovation, to ensure that the best ideas – with a clear focus on cost reduction – can be taken forward to the market.
Development of a market for low carbon electricity through Electricity Market Reform, including availability of Feed-in Tariff Contracts for Difference for low carbon electricity tailored to the needs of CCS equipped fossil fuel power station.
Intervention to address key barriers to the deployment of CCS including work to support the CCS supply chain, develop transport and storage networks, prepare for the deployment of CCS on industrial applications and ensure the right regulatory framework is in place.

Our vision is for a new world-leading UK CCS industry in the 2020s. An industry that can compete on costs with other low carbon technologies. An industry which can create a wealth of green jobs. And an industry which can reduce emissions from both power stations and energy intensive industries in a coherent and cost-effective way, rather than simply individual projects in isolation.

Role of CCS in the UK

It is not possible to predict with certainty which will be the most cost effective routes to decarbonisation of our electricity supply and industrial sector. We do, however, use economic models to produce projections using the best evidence currently available.

Analysis undertaken for DECC’s Carbon Plan – which was published in December 2011 - suggests that around 40–70 GW of new low carbon electricity generating capacity will be needed by 2030, depending on demand and the mix of generation that is built.

That same analysis shows that CCS could contribute 10GW of capacity to the UK electricity market by 2030 and up to 40GW by 2050. And in the industrial sector our analysis suggests that industry will be capturing and storing 48 Mt CO2 per year by 2050.

UK industry is even more ambitious, the CCS Association has set out their aim for 20 to 30 GW of CCS by 2030. Our projections are not targets, it will be for the market to decide which of the competing technologies delivers the most cost effective mix of supply to ensure a balanced electricity system and a decarbonised industrial sector. For CCS to be favoured in the long-term therefore needs investors to be confident that the technology will provide the benefits anticipated at the right price.

Deployment on this scale is clearly a challenge. But it is one we are well placed to tackle. The North Sea has extensive storage capacity available, recent studies show approximately 70 billion tonnes of storage capacity in UK waters alone.

We also have the benefit of expertise that we can apply from our long background of success in the oil and gas sectors. And we have a sound basis of academic research that we can draw on.

Development of CCS for the power sector is our immediate priority, but progress in this sector will also facilitate deployment of industrial CCS. Early deployment on power stations could be the starting point for the development of CCS clusters, with multiple sources of carbon dioxide benefitting from access to shared transport and storage infrastructure.

We will be publishing when the CCS programme is launched a CCS Roadmap setting out our plans for addressing all of the interventions Government is taking to deliver the outcome of cost-competitive CCS in the 2020s.

UK CCS Programme

I know you are all eager to hear details of our new programme following our decision not to take the Longannet project forward. We are working as fast as possible to make sure we have the best programme possible, building on the lessons from the first competition.And we did learn an enormous amount from the UK’s first competition. Everyone involved should be extremely proud of all they achieved.

The work showed that commercial scale CCS is technically feasible and for the first time made complete engineering designs for the end to end chain of capture, transport and storage freely available for the world to see. This is amongst the most detailed and extensive information about CCS projects released anywhere in the world and shows the detailed interrelationships encompassing all aspects along the full CCS chain.

The material is available from the DECC website, I urge you to take advantage of it. I also offer a challenge to other projects being developed around the world. We have made this valuable information freely available to everyone, so that it can be put to use helping to speed CCS toward commercialisation. I challenge you to take the same steps. With a global effort we can ensure that CCS is ready more quickly, and at lower cost.

The scope of our new CCS programme is being developed and will be announced as soon as possible. The focus of the programme will be to reduce the costs of CCS and enable commercial deployment in the 2020s.

This means we need to create certainty around the levels of investment needed to get CCS operational, and also the additional running costs. We will be designing the new process to make sure we reach this overall objective as quickly as possible and at best value.

And with this overall objective in mind we are also considering opening up the new competition to potential clusters of projects, part chain projects (for example individual capture plants) where they have a clear likelihood of becoming full chain in the near future, and industrial CO2 emitters where they support cluster proposals.

Our aim is to take decisions on which projects to further support six to nine months after the launch of the competition, allowing us to synchronise with the European NER300 timetable.

We are absolutely aware of the need to provide certainty but also believe it is important to take the time now to reflect on lessons learned from the first competition and make sure we get the details of the new competition right.

Whilst we can’t set out the final details right now, I can tell you that our approach is likely to be:

more collaborative - for example, potentially sharing information from studies such as FEED as they progress. That means building on the lessons from Longannet to maximise the value of knowledge and effort at the earliest opportunity;
more open - allowing industry to put forward proposals that will help deliver our goals both as quickly as possible and at best value. Again this builds on a key lesson from Longannet: that you, the industry, have the knowledge to drive the technology forward at best value; and
targeted at creating a future CCS industry, rather than just projects in isolation. This follows industry feedback on the importance of planning for infrastructure for the future. We’re working to finalise the criteria over the coming weeks, but we’re actively considering projects to put forward proposals that stimulate clustering and anticipate the development of future infrastructure. But as ever, there must be a clear value for money justification: such proposals must contribute to our overall objective of ensuring CCS is cost-competitive in the 2020s.

This is about developing a CCS industry for the future, so we can decarbonise our electricity generation and our industrial processes – especially in those regions which are home to clusters of energy intensive industries.

Projects will be supported from the £1bn capital we have made available and we also have the potential for low carbon Contracts for Difference which our reforms to the electricity market will make available. Taken together, we believe this will be one of the best offers from any Government to support CCS deployment going forward.

Electricity Market Reform

Confidence is the key to delivering the investment we need in the UK electricity sector. Technology developers and investors will require confidence that there is a long-term future for their technology, that there is certainty of opportunity for those who want to take CCS and other low carbon technologies forward. That is why the UK Government is implementing the biggest reforms to the electricity market for a generation – to provide the certainty that investors require.

The Electricity Market Reforms that we have announced offer the prospect of a future market for CCS electricity that will drive investment in commercial CCS plants. We are currently considering reforms that offer for CCS:

long term contracts to provide stable financial incentives;
support for early CCS projects with contracts that are designed to recognise uncertainties associated with these early projects;
an Emissions Performance Standard (EPS) set at the equivalent of 450g CO2/KWh for plant running at baseload to limit emissions;
a Carbon Price Floor (CPF) that will further incentivise investment in low-carbon generation now, whilst also giving appropriate exemptions for CCS generators to help increase competitiveness in the market;

Innovation programme

Our innovation programme forms an essential component of our work on delivering CCS. With our delivery partners - the Technology Strategy Board, Energy Technologies Institute (ETI) and Research Councils - we expect to invest around £125m in our CCS research and development programme up to 2015. The programme will continue to provide support for projects such as the UK’s first carbon capture pilot - a 5MWe post-combustion capture plant attached to the Ferrybridge power station, which was launched last November.

This cross-government programme will also support fundamental research and training in our universities and research organisations, small companies developing innovative CCS technologies, as well as a further two pilot-scale capture projects.

My department will also launch a competition in the spring to award up to £20M to CCS innovation projects.

Other interesting projects in the UK include the upcoming publication of the UK CO2 storage atlas – led by the Energy Technologies Institute, which will be published in the spring. as well asa privately funded 3MW post-combustion capture pilot at RWE’s Aberthaw coal power station.

Tackling barriers to deployment

Alongside this focus on providing the market framework for CCS we must work to ensure that barriers to deployment of CCS are addressed.

Development of a new CCS industry at the scale and in the timeframes envisaged requires, amongst other things:

an enabling regulatory framework – we’ve done this in the UK by establishing a comprehensive regulatory regime for all stages of the CCS process including full implementation of the CCS Directive, and clarifying other important legal issues such as who owns the rights to store carbon dioxide.
a strategy on storage that has resulted in a number of comprehensive reviews of UK offshore storage capacity – so we have a good feel for where storage sites are located, how viable they are and when, in the case of oil and gas fields, they will become available. We also have an established process in place for obtaining rights to those storage sites and obtaining the permits needed to explore and eventually store carbon dioxide in those locations.
people with the right skills, and supply chains capable of providing the required goods and services. Obviously there is a limit to what governments can do in this regard, but we are keen to work with industry to provide the market pull; and
a clear vision of how, where and when to develop transport and storage infrastructure, including the possibility of supporting infrastructure sized to take account of potential future use.

Conclusion

CCS is essential to meeting our climate change and energy objectives. The reforms to the electricity market we have proposed will provide the market certainty, giving investors the confidence they need to take decisions to support CCS projects. Our programme of work to reduce costs will push the technology toward commercial viability, and by working together with industry we will make CCS a reality. The details of the CCS programme will be announced shortly and I look forward to working with you and hearing your views.

-END-

Edward Davey response to Guardian wind power articles

Mon, 27 Feb 2012 12:16:00 GMT

27 February 2012

Edward Davey told the Guardian:

“A responsible energy policy for this country is one that rules IN all of the key low carbon technologies to help us keep the lights on and emissions down.

“Ruling any of them OUT would be folly. It would mean one less way of cutting our dependence on imported gas, one less way of cutting our carbon emissions. And it would hit consumers where it hurts.

“Onshore wind is the cheapest of the renewables – in fact we’ve already proposed cutting the subsidy to reflect falling costs.

“Abandoning it now would force us to rely more heavily than envisaged on offshore wind before that becomes cheaper, adding a further £5 to every annual household bill by the middle of the decade.

“Built in the right places, and with the benefits for local communities we’re introducing, onshore wind has a crucial role to play.

“We need a portfolio of all the available technologies and the investment and jobs that comes with it. That’s what the coalition is united behind and it’s what MPs from all parties voted overwhelmingly in favour of last year.”

Energy statistics: statistical press release

Thu, 23 Feb 2012 09:30:00 GMT

The Department of Energy and Climate Change today releases its December energy statistics, that allow an assessment to be made of trends in energy production, transformation and consumption in 2011.

Read the full press release:

Statistical press release (2012/013): UK energy statistics – 2011 provisional data

Charles Henry’s speech at the Energy and Utility Forum

Wed, 22 Feb 2012 14:29:00 GMT

Delivering the New Energy Economy

22 February 2012

Check against delivery

Introduction

Thank you for inviting me to take part in this event.
The current energy market has served us well in recent years.
But we now face a number of unprecedented challenges which the market will struggle to address.
Around 20GW, or one fifth, of existing electricity plant are to close over next decade.
Demand for electricity is on increase as we turn to electricity for heat and transport. Demand is likely to double over the next 40 years.
This could mean tight capacity margins, compared to the relatively ample of supply of recent times.
Also firmly committed to ambitious climate and renewable targets to build a cleaner energy future for Britain and the world.
This includes statutory targets to :
- reduce green house gas emissions by 34% by 2020; and,
- 80% by 2050; and,
- an EU requirement to deliver 15% of all UK energy from renewable sources by 2020.
To meet these challenges we need to see broad changes to the way that we generate energy and the way we handle demand and supply.
And we must deliver this at the lowest cost to the tax-payer and to consumers in a world of unstable fossil fuel prices.
This is why we are working towards a market framework that encourages the right kind of investment, and the growth of the new energy economy.
An economy in which:
- security of supply is achieved by diversity of generation technologies;
- in which affordability is ensured by competition between generators; and,
- in which climate change is tackled by reducing carbon emissions.

Making it happen

We want to develop a diverse energy mix by encouraging new investment. We are establishing a stable and long-term framework to mobilise private-sector capital.
According to a recent poll of more than 150 investor by Credit Suisse, the UK is overwhelmingly perceived as the favourite region in terms of regulation, ahead of all other countries.
And the UK has the best wind, wave and tidal resources in Europe.
So there is good reason to believe we can achieve the kind of investment we need, provided that we get policy right as we go forward.
Partly about finding innovative ways to leverage private sector investment.
For example, the Green Investment Bank – the first of its type in the world – plans to leverage £15bn of private sector capital in low carbon infrastructure by 2015.
Partly about getting the market framework right – need to make sure that the parameters within which the market operates send the right price signals.
This is why we are reforming our electricity market.
The vision of EMR is for low-carbon technologies to compete on cost in the 2020s and beyond, so that we can use whatever clean energy mix turns out to be the cheapest.
It will be the biggest change to the electricity market since privatisation. It will transform the UK’s electricity sector.
Aims to attract the huge amount of investment that is needed – up to £110bn by 2020
Policy set out in the EMR White Paper of July 2011. Strategic framework completed in the Technical Update in December last year.

Several policy elements to EMR...

Firstly, Feed in Tariffs with Contracts for Difference (FiTs CfD).
Long-term contracts which will provide clear, stable and predictable revenue streams for investors in all forms of low-carbon electricity generation.
We will tailor the design of the contracts to the needs of different generation types. Each technology is to have an appropriate contract to properly incentivise investment.
We will be publishing details of how these will work very shortly (Q1 2012).
EMR will also introduce a Carbon Price Floor (CPF) and an Emissions Performance Standard (EPS) to further to encourage investment in low carbon technology.
These measures will ensure that a fair price is put upon carbon and will act as a backstop against new unabated coal plant.
Finally, a Capacity Mechanism will ensure sufficient reliable capacity in the long-term.
Without action, we face a significant fall in projected capacity margins around the end of this decade.
To address this, we have chosen a Capacity Market to perform the role of a Capacity Mechanism.
It is the most effective way to ensure security of supply and provides an insurance policy against future blackouts.
The Capacity Market will make sure that sufficient reliable capacity is available by providing incentives to invest in new capacity or for existing capacity to remain open.
In the Technical Update, we also set out our decision that the System Operator, National Grid, is the appropriate body to be responsible for delivery of both the contracts for difference and the Capacity Market.
It will be positioned to give independent expert advice to Government on the parameters of the contracts including how much low-carbon generation is needed, what prices should be offered, whether to run the capacity auctions, and how much capacity is needed.
These policy elements demonstrate commitment to seeking long term investment in low carbon energy that will build and maintain investor confidence.

Balance and competition

But delivering the new energy economy is not about going green at all cost; it is about balance. We recognise that a diverse energy supply is a secure one.
We are committed to allowing the construction of new nuclear power stations without public subsidy. As the cheapest low-carbon source of electricity around, nuclear power is a vital part of our energy portfolio.
Coal and gas will have a role to play in our energy mix in coming years, but we must manage their carbon emissions.
We are firmly committed to working with industry to enable cost-competitive deployment of CCS in the 2020s.
There are a number of promising projects proposed in the UK and later today I’ll be speaking to industry [CCS Industry Event] about our latest plans for our new competition, before finalising our approach and launching the competition next month.
Natural gas is an essential part of our energy mix.
- Will remain so in the future and beyond 2030
- Particularly if the reported Shale Gas reserves beneath Lancashire turn out to be proven and safely accessible.
The aim of our policy is to work with the existing market to lead the way for green, low-carbon eneration to compete fairly on cost, to encourage competitive tension between all forms of generation.

Planning

To allow such a competitive market to flourish, we also recognise the importance of ensuring that the major infrastructure planning regime is effective, efficient and transparent.
Government is taking forward the Major Infrastructure Planning Reform Work Plan published in December 2010 which made specific proposals for the major infrastructure planning regime.
Progress has been made in this area:
We have decided on transitional arrangements for the abolition of the Infrastructure Planning Commission when the Localism Act provisions commence in April.
We are creating a new National Infrastructure Directorate within the Planning Inspectorate;
The DECC SoS will take decisions on energy infrastructure and we have established an informal ministerial group to monitor progress on pre-Planning Act applications.
Finally, we have committed to reviewing the regime’s effectiveness after the new (National Infrastructure) Directorate is established and a number of varied cases have been through the process.
The National Policy Statements are a further important milestone in the Government’s programme to secure affordable low carbon energy. They will help ensure that the UK is a truly attractive market for investors in energy infrastructure by ensuring that we have a planning system that is rapid, predicable and accountable.
The House of Commons approved the six National Policy Statements for Energy on 18 July 2011.
Planning decisions will be taken within the clear policy framework set out in the NPSs, making these decisions as transparent as possible.

Investment Progress

These initiatives will increasingly deliver the changes to our energy economy that we need to respond to the challenges of security, affordability and climate change.
And we are already seeing successes in attracting investment in key technologies.
There has been significant progress in the deployment of renewables and the rate of growth will increase further in 2012.
At the end of December 2011, the UK provisionally had 11GW of installed renewable electricity capacity. This includes 6.2 GW of wind and just under 2.6 GW of biomass. There is also 6GW more under construction.
The UK is number one in the world for installed offshore wind capacity and will remain so for the foreseeable future, with over 1.5GW of capacity at the end of 2011.
Walney offshore wind farm, officially opened two weeks ago by the Secretary of State, is the largest offshore wind farm in the world.
SSE’s Clyde wind farm started exporting electricity to the grid in June 2011. Once fully completed it will be Europe’s largest onshore wind farm, with over 150 turbines generating 350MW.
Tilbury power station, which is due to start generation shortly, will be the first UK conversion from fossil fuel to biomass fuel. At 750MW it will be the largest project of its kind in the world - 15 times larger than the biggest existing UK biomass plant.
In nuclear, three consortia of European energy companies have come forward with plans to build 16GW of new nuclear capacity.
This equates to investment of around £50 billion with the construction of each reactor delivering investment equivalent to that for the 2012 Olympics.
Up to 5,000 jobs could be on offer at each site at which a new nuclear power station is built.
EDF intends to build four new EPR reactors, totalling 6.4GW, at Hinkley Point and Sizewell. Approval has been given to begin preliminary works at Hinkley Point. The planning application was formally accepted by the Infrastructure Planning Commission in November 2011.
Horizon Nuclear Power (a joint venture between RWE and E.ON) intends to build at least 6GW of new nuclear capacity at Wylfa and Oldbury. Horizon has successfully completed its purchase of land at the site of the Wylfa B nuclear power station in October and at the proposed site of the Oldbury B nuclear power station last month.
And NuGeneration have begun site characterisation work on land which will be developed as part of their plans to build 3.6GW new nuclear at Moorside.
We are currently tracking between 60 - 70 new oil and gas projects, coming forward over the next 5 years, comprising of new developments and incremental projects.
For example, in August last year, approval was given to InterGen for a 900 MW gas power plant in Coryton, Essex, representing an investment of £600 million.
At the end of the year, ministers gave go-ahead for a 1,500 MW Gas power plant in Thorpe Marsh, representing up to £984 million of investment from Acorn Power Developments, as well as up to 800 new job created during its construction.

Consumers and Affordability

I recognise that consumers have concerns about the costs of bills, both from day to day and in the long term.
The policies we are putting in place will mean that in years to come we will be able to use whatever blend of low-carbon technology turns out to be the cheapest.
Energy prices are expected to rise in coming years.
Without reform, we estimate electricity bills will be around £200 higher in 2030 compared with today’s average annual household bill.
With EMR we estimate we can limit this increase to £160.
Compared to continuing with current policies, EMR could lead to a net gain to the economy of around £9bn over the period to 2030.
The Government is engaged in the biggest reform of the electricity market in a generation precisely to drive competition and attract the investment in the clean, home-grown energy sources we need to keep the lights on and reduce our reliance on fossil fuel imports.
The costs of renewable energy are often overstated and need to be set against the need for a diverse energy mix for security of supply.
Renewable energy will stem the rise in our use of imported fossil fuels, with the need for gas imports projected to be 20-30% lower than they would have been in 2020. And we will be less exposed to volatile international fossil fuel prices.
We can also expect to enjoy the benefits of being a world leader in this sector to business growth and job creation.
From April 2011 to January 2012 we are aware of a total of £3.8bn announced and planned investments, with the potential support of over 13,800 temporary and permanent jobs.
In the short term, too, consumers have concerns about the price they pay for energy.
Energy companies are private companies operating in a market – one that, for now, is dominated by unstable fossil fuel prices.
They need to make a profit and invest in things like the new power plants we will need in future, as well as making a return for their shareholders.
That said, helping consumers with their energy bills the Government – in October the PM held a Consumer Summit at which Government, consumer groups, energy suppliers and Ofgem agreed measures to keep consumer prices down.
Ofgem is looking at this issue carefully as the independent regulator and we look forward to seeing their next steps.
The fact is we need to see much clearer pricing and much more competition in the energy market and both the Government and Ofgem are working to bring this about.
Since the beginning of this year some of the smaller energy companies and all of the larger energy suppliers have announced price energy cuts.
Despite these welcome developments, we know households across the country are facing a tough winter and while we can't control volatile world energy prices we can still help people get their bills down.
The easiest ways to get energy bills down quickly are to get people paying the lowest possible tariffs and to reduce the amount of energy that is wasted.
To achieve this, the Government, consumer groups, the Regulator and suppliers are working together to help consumers Check, Switch, Insulate to Save money.
Collective purchasing and switching also has huge potential to increase engagement in energy markets and ensure consumers get a fair deal.
Last week we saw an announcement from Which? That more than 75,000 consumers have signed up to a pioneering campaign of collective purchasing.
DECC are continuing to look at how we can encourage consumers to harness their collective purchasing power.
We are also making sure there is more support for most vulnerable households to get them through the worst of the winter. The Government has increased the money available to help fuel poor consumers this winter to £250 million, up two thirds compared to the previous year.
The new Warm Home Discount scheme will provide help to around 2 million low income and vulnerable customers this year – including 600,000 of the poorest pensioners who will get energy bill rebates worth £120 this winter. The most vulnerable are also being urged to take advantage of Warm Front, a government grant scheme to help make homes warmer.
The Government is also backing moves by Ofgem, following their Retail Market Review, to make energy tariffs easier to understand and tackle poor practices to help consumers engage with the market.

Conclusion

Delivering a new energy economy that can provide us with secure, clean, affordable energy is a huge policy challenge, but one which we have made great progress on.
But as our plans begin to be implemented and we anticipate the introduction of the Energy Bill, it falls to the private sector to take advantage of the framework and to provide the level of investment whether in renewables, nuclear or CCS, and to continue to drive the transformation of the UK’s energy supply.

Carbon Capture and Storage Industry Day

Wed, 22 Feb 2012 14:09:00 GMT

In his first engagement on CCS since coming to office, the new Energy and Climate Change Secretary Edward Davey today reiterated the Coalition Government’s commitment to supporting carbon capture and storage. Speaking following CCS Industry Day, he said:

“Since I first read about the technology back in 2005 I’ve held the view that carbon capture and storage is crucial to a low carbon future for our planet.

“It could transform mankind’s relationship with fossil fuels. Once demonstrated it will have national and international ramifications for how we power our economies with clean secure energy for decades to come.

“The UK has the chance to lead the world in CCS and the Government is backing its commitment with £1 billion. We want to work with industry to deliver a new, vibrant CCS programme by the 2020s that helps deliver our low carbon targets in a realistic and cost-effective way.

“We are fortunate to have many promising proposals for CCS projects. It was a privilege today to hear of the high level of interest and commitment from industry. I look forward to working with the industry to turn our vision for CCS into reality.”

Edward Davey comment on Ofgem announcement on liquidity reforms

Wed, 22 Feb 2012 11:39:00 GMT

22 February 2012

Commenting on this morning’s Ofgem announcement on its liquidity reforms, Energy and Climate Change Secretary Edward Davey said:

“I welcome Ofgem’s proposals and the momentum that is building behind badly-needed reforms of our energy market. Consumers will get the best deals when suppliers face tough competition and that is what both Government and regulator are working to achieve. Right now only six big companies have 99 per cent of domestic customers - energy bill payers in this country need more and better choices.

“We’ve cut red tape for small suppliers to give them a leg up into the market, and we are also working with Ofgem to deliver clearer bills and simpler tariffs. We have strengthened Ofgem’s own hand by making it harder for energy companies to block licence changes, and we are looking at beefing up Ofgem’s powers further to ensure fairer outcomes for consumers.”

Feed-in Tariff appeal: Application to the Supreme Court

Tue, 21 Feb 2012 17:13:00 GMT

A DECC spokesperson said:

“We respectfully disagree with the Court of Appeal’s decision on Feed-in Tariffs and we have today lodged an application with the Supreme Court seeking that court’s permission to appeal. We are now awaiting a decision of the Supreme Court on permission.

“We want to see the available funding spread as far and wide as possible making FITs a scheme for the many not a scheme for the few, supporting sustainable jobs in solar and in a whole range of small scale renewables.”

25 January 2012 Statement on Court of Appeal decision:
21 December 2011 Statement on High Court ruling:

Charles Hendry’s speech to the University of Edinburgh Business School

Mon, 20 Feb 2012 14:09:00 GMT

There are four key challenges to address for UK energy security – in the medium to long term:

Declining domestic production: The UK became a net importer of gas in 2004, making us increasingly exposed to risks from rising global demand.
Global factors are driving wholesale fossil fuel price rises: international demand – such as from China.
Power Station Closures: A quarter of existing power stations to close over the next decade, and;
The need to decarbonise: Huge investments – up to £110bn in electricity sector by 2020 alone, to meet greenhouse gas emission reduction targets. And a potential doubling of electricity demand by 2050 for heating and transport.

The challenge is clear – but what is the correct path to choose?

Our 2050 Pathways Analysis – which is fully openly accessible on our website - presents a framework through which to explore a range of potential energy pathways from today to 2050.

It’s been used by the public with 20,000 people submitting their own vision and over 150 000 unique users trying their own pathways and joining debates online. Experts and NGOs submitted their views.

Government is listening to these views. In the medium term we are looking at becoming smarter with the energy we use. The Green Deal this year will focus on improving our energy efficiency, both at home and at our work places. Also, we need to move our electricity generation mix as well as our transport sector to low-carbon solutions.

We are building a coalition for change – government, businesses, NGOs, academia and the public – to deliver this 2050 vision.

A key output of the 2050 Pathways work is that innovation and new business models are going to be key.

Globally, the low-carbon goods and services is worth £3.2 trillion, and employs 28 million people. It is growing by 4% a year, faster than developed world GDP, and will accelerate.

Private finance is already rushing in. In the first half of 2010, green technologies accounted for a quarter of all US venture capital investments. Globally, investment in renewables now outstrips investment in fossil fuels.

In the UK we have committed to significant investments in low carbon growth solutions.

Capitalised initially with £3bn, the UK Green Investment Bank will play a vital role in addressing market failures affecting green infrastructure projects in order to stimulate a step up in private investment. £1bn has also earmarked for commercial scale CCS demonstration in the UK.

It is also a sector driven by relentless innovation in business practices. To meet these challenges investment alone is not enough, but changing our behaviour towards the usage of energy will be at least as important. These are choices which will impact our daily lives, just for example:

The investment associated with our reforms to the electricity market has the potential to generate around 250,000 jobs in low carbon electricity to 2030.
We will roll-out a smart meter to every UK home by 2020.
We aim to insulate between 2.5 to 5.2 million solid walls in the UK until 2030.
By 2050, we expect to be using per capita a third less energy from today.

These goals together with other sector targets are described in our December 2011 publication ‘The Carbon Plan’. The document sets out the scale of investment and the opportunities for industry and business within the overall national low carbon challenge.

Of course one cannot look to the future and not address the issue dominating the present Scottish political horizon - independence.

In energy we have a united ambition –Scotland as a renewable energy powerhouse of Europe.

We are working closely with the Scottish Government to make sure Scotland fully benefits from its resources. Being a United Kingdom means we can attract the large investment necessary and spread the costs. I firmly believe that Scotland’s ambitions profit from being part of the union.

Huge investment is needed in the electricity sector in the coming years. For example from 2020 to 2030 30-40 GW of low carbon capacity needs to be added to the grid in order to meet our energy and climate change commitments. This will require an investment of around £100 billion.

Last week Scottish Power and National Grid announced a £1bn contract for the longest underwater connector in the world between Hunterston, in Ayrshire, and the Wirral peninsula, near Liverpool.

The 260 mile long cable is due to be operational by 2016 and improves grid connections by bringing power produced by remote wind farms to consumers.

These improvements are critical – and made easier because of the size of the market. By being a United Kingdom we can attract the large investment necessary and spread the costs.

You (Students) are the generation which will shape and deliver this low carbon vision in the coming decades.
You can join this debate by developing your own 2050 Pathway for the UK on our website and:

Submit your 2050 future by using the My2050 simulation on our website
Join our discussion on 2050 on our DECC blog; or
Contribute to our 2050 Pathways call for evidence on the issue of costs and air pollution impacts. In a wiki-like format we hope to ensure that all views are being heard and are part of the analysis.

It is by taking action now that we secure the low carbon jobs for Britain and keep prices affordable. Only with you can we make this happen.

Charles Hendry visit shows Scottish green growth in action

Mon, 20 Feb 2012 12:01:00 GMT

Minister of State Charles Hendry saw the positive effects of Government support for Scottish renewable energy projects during an official visit to Edinburgh today.

He began his trip with a visit to Artemis Intelligent Power, an innovative green technology company based in the City.

Artemis was one of the first recipients of a DECC grant as part of the Low Carbon Energy Demonstration programme. The project, ‘Field proving of Digital Displacement® hydraulic wind-turbine transmission’ was intended to accelerate the development of Artemis technology as a means of bringing down the lifetime costs and improving the performance of large offshore wind-turbines.

DECC has continued to support the development of the Artemis wind-turbine transmission as part of the Environmental Transformation Fund.

The potential of the technology has been recognised by Mitsubishi Heavy Industries who acquired the company in 2010 and have announced that they intend to use the technology in a new 7MW offshore wind specific turbine that is currently under development. Artemis is also focussing on the development of drive-trains for the next generation of multi-megawatt offshore wind-turbines.

The visit continued with the Minister’s annual address to students at the University of Edinburgh Business School.

The Minister stressed that while oil and gas remain a key part of the energy mix, renewables are now also providing opportunities, including providing power for hundreds of thousands of homes and delivering as many as 70,000 jobs over the next decade.

Read Charles Hendry's speech at the University of Edinburgh Business School

Energy alliance with France brings jobs and investment

Fri, 17 Feb 2012 10:45:00 GMT

The UK and France today put the green economy and energy security at the heart of their relationship. This came as companies from both nations agreed a raft of commercial deals, and the two governments signed up to new agreements to cooperate on energy issues.

Deals signed today in the presence of Prime Minister Cameron and President Sarkozy include:

A groundbreaking deal worth £400m on nuclear reactors between Rolls Royce and Areva, including the first EPR reactors at Hinkley Point, Somerset. This will underpin a new Rolls Royce factory in Rotherham and support 1,200 new jobs across the nuclear supply chain in Britain;
A new engineering contract between EDF and Kier/BAM for the UK’s first proposed new nuclear project at Hinkley Point, Somerset, meaning another £100m for companies operating in the South West and 350 jobs;
A £15m investment in a new world class training campus in Bridgwater, Somerset for EDF employees, new starters and the local community.

Welcoming the strength of the UK- France energy relationship and their joint commitment to the transition to a low carbon economy, the two Governments agreed:

A call for further studies into electricity interconnection between the UK and France;
A deal to extend cooperation on civil nuclear security and share best practice on security at nuclear sites;
An agreement to cooperate closely on research and development in the nuclear industry;
A commitment to work closely to ensure that both nations’ nuclear industries have the necessary skills in place.

Prime Minister David Cameron said: "Today's summit shows the strength and depth of Britain's ties with France. At our last summit, we signed a historic partnership on defence.

“Today, we are matching that ambition on nuclear energy. As two great civil nuclear nations, we will combine our expertise to strengthen industrial partnership, improve nuclear safety and create jobs at home.

“The deals signed today will create more than 1,500 jobs in the UK but they are just the beginning. My goal is clear. I want the vast majority of the content of our new nuclear plants to be constructed, manufactured and engineered by British companies. And we will choose the partners and technologies to maximise the economic benefits to the UK. Today marks an important first step towards that. A good deal for Britain and a good deal for France."

Edward Davey, Secretary of State for Energy and Climate Change, said: “We need hundreds billions of pounds of investment in clean energy projects in the UK. This will bring high-skilled job opportunities the length and breadth of the country. Construction workers, engineers, technicians – they will all have a role to play.

“There are plans for new nuclear in Somerset, Suffolk, Cumbria, North Wales and Gloucestershire. Supply chains will spring up too, and extend the reach of economic benefit across the country. This investment could be worth around £60billion and create up to 30,000 jobs.

“The deals signed today reflect our ongoing desire to work closely together with our French allies and the private sector on nuclear, and across the energy mix.”

Notes for editors:

Coryton Refinery agreement: Charles Hendry Statement

Wed, 15 Feb 2012 16:05:00 GMT

Energy Minister Charles Hendry said:

“This is excellent progress for Coryton refinery. It provides the business and its employees with a period of stability, keeps the facility operational and gives the administrators time to work on a long term solution for the site.

This has been an outstanding example of the whole local community working together to support the Administrator. My thanks to everyone concerned for the work done so far.”

Price Waterhouse Coopers press release

New pipe works mean gas security for North Wales

Mon, 13 Feb 2012 09:24:00 GMT

13 February 2012

Press Ref: 12/011

A vital gas pipeline providing energy security to thousands of households in North Wales is to be replaced.

Energy Minister Charles Hendry has today given approval for Wales and West Utilities to construct a 22 kilometre gas pipeline from Llanwrin in Powys to Dolgellau in Gwynedd, north Wales.

The pipeline will replace an existing pipeline which has reached the end of its life.

Charles Hendry said:

“The new pipeline will mean that thousands of residents in Gwynedd and Powys in north Wales will have a safe and secure supply of gas. Natural gas is the main source of heat for most households and so it is critical we have a modern network that provides supply on demand.

“In approving this pipeline I have made sure the plans meet stringent and comprehensive environmental standards.”

The new buried steel pipeline will roughly follow the route of the existing pipeline, with a deviation at Corris approximately 11kms (7 miles) to the north of Llanwrin.

Notes for editors

A comprehensive set of environmental conditions has been agreed with the Snowdonia National Park Authority, the Environment Agency for Wales and the Countryside Council for Wales to protect the integrity the Cadair Idris Special Area of Conservation and the Snowdonia National Park.
The pipeline will serve the administrative areas of Gwynedd and Powys. 2009 data shows that Gwynedd had 28,600 domestic consumers and Powys had 26,800. The population for Gwynedd was estimated at 119,000 in 2009 and for Powys 131,000 in 2010.
Wales and West Utilities anticipates that the pipeline will be completed and commissioned ready to operate in October 2012.