CCS, renewables and nuclear to deliver UK's low carbon energy future

‘Investing in a Low Carbon Britain’, is a joint publication by BERR (Department of Business, Enterprise and Regulatory Reform), DECC (Department of Energy and Climate Change), and Dius (Department for Innovation, Universities and Skills), and expands on some of the strategic thinking behind the raft of green measures in yesterday’s Budget.

It is very much a companion piece to ‘Building Britain’s Future: New Industry, New Jobs’, published earlier this week, and builds on one of the conclusions of that report, that actions of Government inevitably affect climate in which businesses operate and that it needs to take a more active role in addressing market failures.

It identifies carbon capture and storage (CCS), offshore wind generation, marine energy, nuclear energy and low carbon vehicles as the areas in which Britain has the potential to take a leading role, because of “our natural resources, strong tradition, skills base or other advantages.”

As such, it concludes, these are the sectors in which Government should concentrate its efforts – though it recognises that other low carbon sub-sectors have significant potential for growth, including solar power, building technologies, geothermal and carbon finance.

‘Investing in a Low Carbon Britain’ sets out a series of ‘cross-cutting’ policies (a new kind of joined-up-thinking) for what it describes as the “trinity of low carbon energy sectors” – clean coal through CCS, renewables and nuclear – which it sees as essential to meeting the UK’s climate change needs while exploiting considerable economic potential.

These measures were, for the most part detailed in yesterday’s Budget. On CCS, the Government has undertaken to deliver up to four demonstration projects and encourage clusters of CCS infrastructure and expertise. This latter strategy is designed to renew the value of the UK’s offshore industries as fossil fuel production declines and will focus on key areas such as Yorkshire and the Humber, the Thames Estuary, Firth of Forth and Tyne Tees, bringing major employment and regeneration benefits.

For renewables there is the promised review of Renewable Obligation Certificates and access to the new £405 million Low Carbon Investment Fund (LCIF), designed to allow both the demonstration of new close-to-market technologies and inward investment into more mature markets. The LCIF will also be used in support of Government action to bring down barriers to deployment and stimulate investment in renewables and their supply chain.

Controversially for some people, the Government continues to promote nuclear as an essential part of the UK’s future low carbon energy infrastructure and says it will create the necessary framework to allow private sector energy companies to build, operate and decommission nuclear power stations.

Apart from low carbon energy, the other key target identified for new Government activism is low carbon vehicles, the policy for which was set out earlier this month in ‘Ultra-Low Carbon Vehicles in the UK’.

The other main strand of ‘Investing in a Low Carbon Britain’ is concerned with freeing up resources from energy spend for more productive investments, which could save UK businesses some £3.3 billion a year, the Government says. It plans to introduce a more systematic approach to increasing efficiency through investment in new infrastructure, including a smarter national grid, and step up support for businesses, consumers and the public sector through a series of investments and loans announced in yesterday’s Budget.

The document concludes: “The policies and the investment we have announced through this document will make a significant start on the road to a low carbon economy in the UK. They will form a central part of our overall strategy for the UK economy and for meeting our energy and climate change goals. We will come forward later in the year with further detail to develop this approach.”