Amber Rudd delivered her ‘energy policy reset’ speech this morning, in which she made a number of key announcements:
- A commitment to phase out coal by 2025
- Three further Contract for Difference auction rounds during the course of this Parliament, the first of which will take place in 2016
- Support for up to 10GW of offshore wind during the 2020s, provided that costs reduce
- A review of whether the system operator should be made more independent of National Grid
Responding to the announcements, Richard Howard, head of energy and environment at Policy Exchange said:
“Securing our energy supplies at the lowest possible cost is clearly the number one priority for the government. Replacing ageing and polluting coal power stations over the next decade is a significant and sensible move, but clearly this raises challenges in terms of security of supply. Delivering new gas power stations is important, but it is not the only solution. DECC should consider interconnectors, energy storage, demand shifting, and improvements in energy efficiency as complementary ways of meeting our future energy needs, as these can be cheaper than building new gas power stations.”
“Amber Rudd has made a bold move on offshore wind, saying that there could be support for be up to 10GW of new offshore wind capacity in the 2020s. This will provide much needed clarity to the sector, but comes with significant strings attached: Government will only provide support if the cost of offshore wind continues to come down. The offshore wind industry has claimed that further cost reductions are possible, and now Government is taking them to task.”