UK Energy Policy

The Department of Energy & Climate Change (DECC) is responsible for the UK’s energy policy.  This focuses on solving the UK’s energy ‘trilemma’ – delivering secure, clean and affordable energy supplies to UK consumers.

The UK policy goal is to ensure that 15% of UK’s energy demand is met from renewable sources by 2020 in the most cost effective way in line with the European Renewable Energy Sources Directive.  This target includes heat, transport and electricity.

The UK’s Climate Change Act has also set a longer term target of achieving an 80% cut in emissions by 2050.

Energy Security

Making sure UK businesses and households have secure supplies of energy for light and power, heat and transport

Action on climate change

Leading government efforts to mitigate climate change, both through international action and cutting UK greenhouse gas emissions by at least 80% by 2050 (including sourcing at least 15% of our energy from renewables sources by 2020.

Affordability & fairness

Delivering secure, low-carbon energy at the least cost to consumers, taxpayers and the economy. And making sure the costs and benefits delivering secure, low-carbon energy at the least cost to consumers, taxpayers and the economy, as well as making sure the costs and benefits of the UK’s policies are distributed fairly so that the most vulnerable and fuel poor households are protected and competitiveness problems faced by energy intensive industries are addressed.

Supporting growth

Delivering policies in a way that maximises the benefits to the economy in terms of jobs, growth and investment, including by making the most of existing oil and gas reserves and seizing the opportunities presented by the rise of the global green economy.

What’s the UK Government doing?

The UK Government has initiated a programme called Electricity Market Reform (EMR) to support 8 renewable technologies, including on and offshore wind, and attract the investment the UK electricity sector needs to meet future energy needs on at the lowest cost to consumers.

From October 2014, EMR will offer long term contracts (‘Contracts for Difference’) to renewable technologies in which the Government will guarantee a fixed price (‘strike price’) for the electricity each plant generates, to provide certainty to investors in the UK across all the technologies. 

The level of ‘strike price’ will differ according to how mature a technology is – technologies considered to be at an early stage of development and therefore requiring greater support to get off the ground (e.g. marine energy) will receive a higher strike price and those considered more mature like onshore wind will receive less.

The Government has set a budget for ‘strike prices’ to ensure that the consumer does not pay more than is necessary to meet our energy needs. If there are more projects than the budget can pay for, projects will compete to be selected on value for money to the consumer.

As onshore wind is the lowest cost, large-scale renewable technology that is currently available, it will receive a low strike price (£95 per MWh) – this will fall again in 2017/18 to £90 per MWh, as technology continues to develop and costs continue to fall.

Last updated: 2014-10-14 14:01