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This report provides an overview of the UK's energy and climate change policies, including the goals set post-2006 Climate Change Programme. It examines the current status of meeting domestic and long-term carbon reduction targets and explores issues such as gas prices, energy prices, and the need for investment in infrastructure. The report also discusses the role of local authorities and regions in driving emissions reductions and highlights upcoming initiatives and funding opportunities.
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Energy & Climate Change National Policy Picture Peter Brunt Energy Group, DTI
Cover • Backdrop: Carbon and Prices • UK Climate Change Goals – post 2006 Climate Change Programme • The Energy Review. • Role of LAs and regions.
Gas prices spiked this winter due to supply ‘tightness’ Result: storage became the marginal source of supply = spot price converges with forward price. Sources of gas supply and wholesale prices in the UK in winter 2005/6 mcm/day, p/therm
Prices for Domestic Users Have Risen, But Remained Competitive with EU UK retail prices compared with EU average p/kWh
Forward prices high, but indicate convergence with continent. UK, Dutch and German* forward prices p/therm, as of 30 January 2006
2006 Climate Change Programme • Takes us close to our Domestic goal: 15-18%. • Range of new measures; e.g: • Expansion of EEC3. • Better Billing & Metering. • Products Policy. • Package of measures for SMEs. • Road Transport Fuel Obligation. • Not the final word on 2010: Ministers clear that they will seek further opportunities for savings. • Process for driving implementation beginning.
Why an Energy Review? • More effort needed to meet our long term carbon targets. • Switch over to reliance on imports – sooner than expected & against a background of rising political concern. • Energy prices. • Investment in infrastructure needed over next decade.
Energy Review: Next Steps • Consultation closed 14th April. 5000+ responses received. • 3 clear messages: • Objectives of 2003 Energy White Paper the right ones. • Need for long term certainty. • Need action on the demand and supply side. • Report to the PM in the Summer.
Key focus for the Energy Review on carbon is long term certainty • Review looking at range of measures to give this: • certainty in the EU ETS; • low carbon obligations; • carbon contracts. • Also looking at energy efficiency: • Buildings old & new: Existing buildings & Code for Sustainable Buildings. • Measures for large, non-energy intensive businesses (Carbon Trust UKETS proposal?).
Role of Local and Regional Bodies • 2003 Energy White Paper & 2006 CCP clear Local Authorities & Regions have key role: • Planning, housing, transport. • RDAs: business support, innovation, skills. • Comms with local & regional communities and businesses. • For 2006 CCP, CSE, Bristol asked to • Identify the levers and opportunities that exist at local and regional level to impact on emissions; • Model the scope for further cost effective carbon savings.
Package of LA measures for CCP: • CC in LA performance framework from 2008. • New statutory guidance (Mark Lazarowicz). • Climate Change PPS. • RDA Carbon Targets? • New LA best practice fund (to be kicked off by Beacon Councils). • Further funding for LAs under Carbon Trust LAEF. • £20m for LAs and others on work to incentivise ee measures to households. • Working with LGA and others – review existing requirements on LAs to shift to outcome focus.
The Future: • New Ministerial team. • Clear that environment moving to centre of political debate. • Equally clear that role of LAs rising up this debate in importance. • Next year critical for the future.
