Julie Elliott

The UK boasts a diverse range of energy sources including oil and gas, nuclear, a number of different renewable technologies and coal. These are home grown sources and it is our policy to add new nuclear and shale gas to the existing mix.

The recently established Oil & Gas Authority is working to maximize the economic recovery of UK conventional and unconventional oil and gas resources. In addition, the UK has six refineries which supply fuel into the domestic market and DECC is working closely with the industry to remove market distortions and ensure relevant regulations are fit for purpose, so they can continue to be competitive.

Furthermore, we are seeking to increase our domestic electricity generating capacity by working with three developers taking forward proposals to build six new nuclear power plants in the UK, including the recent commitment by EDF and CGN to take forward the Hinkley Point C Project. Renewables are also increasing our domestic generating capacity having provided nearly one fifth of the UK’s electricity needs in 2014 and we are on track to reach our target of 30% by 2020.

Carbon Capture and Storage (CCS) play an important role in meeting our 2050 emissions reduction target.

The CCS Commercialisation Programme could provide capital and operating support for up to two commercial scale projects, subject to value for money. As part of our support for CCS, we are investing up to £100 million to support detailed engineering studies at the proposed Peterhead and White Rose CCS projects to enable Final Investment Decisions.

Together with the Scottish Government we have committed, in principle, to provide £4.2 million to support Summit Power to undertake industrial research and development at their proposed CCS Caledonia Clean Energy Plant in Grangemouth, Scotland.

We have also invested over £130 million since 2011 to support research and development and innovation to foster the next generation of CCS technologies.

We are delivering our election commitment to end subsidies for new onshore wind. We are seeking to legislate through the Energy Bill to close the renewable obligation (RO) to new onshore wind capacity from 1 April 2016, one year earlier than planned. The Department has published an Impact Assessment (IA) that considers the potential effects of the Government’s proposals to close the RO to new onshore wind early. This contains the information requested and can be viewed on Parliament’s website at:

http://services.parliament.uk/bills/2015-16/energy.html

Small-scale onshore wind projects up to 5 megawatts in scale are eligible for support under the feed-in-tariff (FITs) scheme. DECC has proposed action, through the FITs review consultation, to control spending and put FITs onto an affordable and sustainable footing. This consultation is now closed and we are considering the responses that we have received. Further information can be found online at the following link, including an IA that considers the potential impact of the Government’s proposals:

https://econsultation.decc.gov.uk/office-for-renewable-energy-deployment-ored/fit-review-2015.

Wave 14 of the Public Attitudes Tracker reveals that 75% of participants support the use of renewable energy to provide electricity, fuel and heat to the UK, 20% neither support nor oppose its use, and 4% oppose it.

The questions on individual renewable energy technologies were not included as part of the wave 14 survey, and will now feature bi-annually. This change is part of a wider review of the Public Attitudes Tracker, which commenced at the beginning of 2015, with the aim to ensure existing questions continue to add value and to increase capacity for additional topical questions going forward.

As three years’ worth of data reveals no clear pattern of change, DECC considered that understanding public attitudes to renewable technologies would not be hampered by reducing the frequency. Similar decisions were taken for the more frequent questions on energy saving and wasting, and energy security. The specific renewable questions will feature again in the next wave to be published on 10^th November.

As is normal for all Bills presented to Parliament, the Government will publish an impact assessment on its proposals to close the Renewables Obligation to new onshore wind one year earlier than planned in due course.

DECC estimate that around 7.1GW of onshore wind capacity proposed across the UK will not be eligible for the grace period and is therefore unlikely to go ahead as a result of the announcement on the 18 June.[1] The precise grace period eligibility requirements will be determined through the legislative process and are subject to approval by Parliament. It will be for the developer of each individual project to determine whether they meet those eligibility requirements and to apply for the grace period.

[1] Based on data extracted from the Renewable Energy Planning Database, April 2015

DECC estimates that up to 5.2GW of onshore wind capacity proposed across the UK could be eligible for the grace period announced on 18 June.[1] The precise grace period eligibility requirements will be determined through the legislative process and are subject to approval by Parliament. It will be for developer of each individual project to determine whether they meet those eligibility requirements and to apply for the grace period.

[1] Based on data extracted from the Renewable Energy Planning Database, April 2015

The table contains an estimate for the gross value added to the UK economy from the onshore wind industry and its supply chain between 2010 to 2013, expressed in current prices.

Figures have been rounded to the nearest £100 million. They include the contribution from both the direct sector and the indirect activity it generates through the supply chain.

The data is sourced from the report “The size and performance of the UK low-carbon economy”, published by the Department in March 2015. It is available online:

https://www.gov.uk/government/publications/low-carbon-economy-size-and-performance

The Department's most recent estimates of UK public attitudes (covering the UK) were published on 28^th April 2015 and can be found here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/424507/PAT_summary_wave_13.pdf.

The results indicate that 65 percent support onshore windfarms. This is lower than the proportion in favour of solar, offshore wind and wave and tidal technologies while 78 percent were in support of renewable energy developments providing direct benefits to the communities in which they are located. An estimated 39 percent support nuclear power compared to 21 percent opposed with 36 percent neither in support nor opposed; and 24 percent support fracking (shale gas) compared to 26 percent opposed with 44 percent neither in support nor opposed.

The Department does not hold this information.

The Renewable Energy Planning Database (REPD) does not routinely capture information on planning applications from renewable electricity projects seeking to repower. The table below sets out the number and capacity of onshore wind projects that received or were refused planning permission in each year since 2009 and whose operator site names quoted in the REPD indicate that they are repower projects:

In November 2014, the Government published estimates of the impact of energy and climate change policies on energy prices and bills:

https://www.gov.uk/government/publications/estimated-impacts-of-energy-and-climate-change-policies-on-energy-prices-and-bills-2014.

The table below sets out the number and capacity of onshore wind projects that received or were refused planning permission in each month of 2014:

The data is compiled from the January 2015 edition of the Renewable Energy Planning Database, which is published on DECC.GOV and updated monthly. This tracks the progress of renewable electricity projects with a capacity of 1MW or greater from submission of a planning application through to determination and generation. The approved projects include a number of projects that were granted planning consent on appeal. Some of the refused projects may be awaiting the outcome of appeals.

Since the publication of the Electricity Market Reform Delivery Plan in December 2013 we have published updated projections of large-scale solar photovoltaic capacity.

The impact assessment which accompanied Part A of the Government response on financial support to solar PV stated that we now expect to see 3.8 – 6.5GW of large-scale solar by the end of 2016/17, when the Renewables Obligation is closed.

The Government is currently undertaking analysis to assess the size and performance of sectors within the low carbon economy, including in the solar PV industry.

DECC officials are in the process of considering responses to the consultation on transferability of rooftop solar PV, in order to prepare the Government response.

DECC officials are in the process of considering responses to the consultation on transferability of rooftop solar PV, in order to prepare the Government response.

This information is not held by the Department. National Grid is the Delivery Body for the allocation of Contracts for Difference. Regulations limit the information released to the Department during and after the allocation process, for example because it is commercially confidential or where its release could undermine the efficiency of the auction process.

We intend to provide information on those applicants who are successful and sign contracts when the allocation process concludes next year. Information which will be made available includes the technology type, capacity, delivery year and strike price of successful projects.

The scope of the periodic reviews has not been set.

Through the course of this Parliament I have received numerous letters from Members of Parliament concerned about the impact of new wind turbine installations in their constituency, many of them referencing significant local campaigns against onshore wind.

This was a consultation that was carried out by the last Government and the current Government has no plans to publish either the results or a response.

The levelised cost of onshore wind and large scale solar photovoltaics (solar PV) are expected to fall over time. These estimated cost reductions are reflected in the administrative strike prices for solar PV and onshore wind in the EMR Delivery Plan, which shows support for these technologies falling over the coming years. Under the CfD auction, it is likely that established technologies will compete on price in order to secure a contract for support. This support will be within the budgetary constraints set through the Levy Control Framework (LCF).

It’s difficult to be certain when subsidies will no longer be required. Taking account of uncertainty, some projects may reach parity with wholesale electricity prices in the latter half of this decade or 2020s in the case of most ‘established’ technologies, such as onshore wind and solar PV, and post-2030 in the case of most ‘less established’ technologies, depending on the electricity price scenario used and the speed of cost reductions. The longer term aim is that renewables will be cost-competitive with other forms of energy generation and subsidies will no longer be required.

Published estimates of levelised costs are available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/269888/131217_Electricity_Generation_costs_report_December_2013_Final.pdf

The Bioenergy Emissions and Counterfactual model can be used by developers and generators to ensure that they are sourcing biomass responsibly. However, the model does not in itself propose specific regulatory measures.

The Department continues to work on the analysis necessary in order to consider the appropriateness and potential design of any such measures. The Contracts for Difference include flexibility to amend the sustainability criteria in the future, should the Department’s further policy work and analysis show that this is needed.

The intention of the Feed-in-Tariffs (FITs) policy change announced on 2 October 2014 is to help ensure that building mounted installations - which can help to reduce energy bills, deliver a reduction in pressure on the electricity grid, build on the UK supply chain, result in greater on-site use and support additional jobs – do not suffer from tariff degressions as a result of ground-mounted installations. It is one of a package of measures which the Government is implementing with the aim of ensuring the building mounted sector is well placed to deploy, whilst at the same challenged to innovate and bringing down costs. Estimates of the impact on deployment of 50kW and over rooftop solar installations were set out in the accompanying Impact Assessment (see Table 7):

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/360306/FITs_solar_IA_MASTER.pdf.

This showed that the impact on cumulative deployment to 2020/21 is estimated to range from -150MW to +90MW.

The amount that deploys under Contracts for Difference (CfDs) will depend on the strike price at which CfDs are awarded (the auction clearing price), as well as the mix of technologies amongst the successful bidders. The allocation round is currently underway for CfDs and DECC is not in a position to predict the outcome of the CfD auctions.

A letter was issued to the Hon. Member for Sunderland Central on 10 October 2014.

Our recent consultation confirmed our policy that solar PV for projects of 5MW and below will continue. We continue to monitor the Renewables Obligation solar PV deployment pipeline for projects of 5MW and below. As indicated in our recent government response to the consultation on changes to financial support for solar PV¹, if this monitoring indicates that deployment is growing more rapidly than can be afforded, we will consider taking measures to protect the Levy Control Framework. Any such proposals would require further consultation.

[1] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/360280/Government_response_RO-FIT_changes_to_Solar_PV_-_FINAL_2014-10-02.pdf

Centrica has stated that they expect the average bill of British Gas customers to be £90 lower in 2014 compared to 2013 in their 2014 H1 Interim Results (available at this link.) http://www.centrica.com/files/results/interim14/2014_interim_results.pdf

DECC works closely with Ofgem and other regulatory bodies on all matters relating to, or affecting, the Renewables Obligation (RO).

The Biomass Emissions and Counterfactual calculator is due to be published shortly.

The evidence is set out in the consultation impact assessment and draws on various sources, including: data from Ofgem on the amount of solar PV capacity already accredited under the RO or which has applied for accreditation; the Renewable Energy Planning Database, which contains substantial information on the solar PV development pipeline; and various industry sources suggesting that there is significant potential for further expansion in the sector before the scheduled closure of the RO in April 2017. The consultation is helping to refine the evidence and we will update our estimates of potential deployment and budget impacts in the final impact assessment.

A copy of the consultation document and consultation Impact Assessment are available on DECC’s web page:

https://www.gov.uk/government/consultations/consultation-on-changes-to-financial-support-for-solar-pv.

Ministers and officials have received numerous representations from, and held many meetings with, the solar industry and project investors about the impacts of our consultation proposals on the solar sector since the consultation opened on 13 May.

The consultation closed on 7 July. The responses and evidence submitted in response to the consultation are now being analysed. We will publish a Government Response setting out our decision as soon as possible.

Following the changes made in 2011, the solar PV industry has enjoyed huge success in the UK. The industry is now worth £2.2 billion a year. This owes much to carefully-controlled Government support, and at the same time tariff changes which protected consumers from a £50 a year bill rise by 2020.

In good faith, we proposed what we believed to be lawful changes to subsidies, in the interests principally of protecting consumers from rising bills at a time when windfall profits meant that the solar PV industry was booming, and we do not have the information necessary to estimate the value of the claims.

There are elements of the judgment which we will be seeking permission to appeal.

Our estimate of the cost of closing the Renewables Obligation (RO) to large-scale solar PV in 2015 is set out in the consultation Impact Assessment (IA). The relevant tables from the IA are reproduced below.

The indicative deployment range for large scale solar PV published in the electricity market reform (EMR) delivery plan remains at 2.4-4 GWp.

We plan to re-assess likely deployment ranges for all low carbon technologies in the 2015 annual update to the EMR delivery plan.

The Government's response to the consultation on competitive allocation set out its expectation that the Power Purchase Agreement (PPA) market will evolve such that PPAs could be signed on a conditional basis. We have discussed this with stakeholders and have identified no significant barriers that prevent conditional Power Purchase Agreements being agreed prior to the allocation of Contracts for Difference. Furthermore, some PPA participants have since confirmed that they are prepared to consider approaches from generators on this basis.

In general, short-term Power Purchase Agreements are widely available in the current market, but providers of project finance tend to require long-term PPAs. The Offtaker of Last Resort (OLR) mechanism will provide additional certainty for projects with a Contract for Difference which should enable them to consider a wider range of routes to market and a wider range of offtakers, including short-term PPAs.

My officials have worked closely with developers, expert advisers and other stakeholders in working up the OLR proposals and to understand the likely impacts on the PPA market. The policy design is at an advanced stage, and the detail of the proposals has been recently consulted on. We are on track to deliver the final policy and introduce enabling regulations ahead of the first allocation of CfDs. CfD applicants will have a high degree of clarity about the arrangements for OLR, in advance of the first auctions.

On Friday 4^th April I launched the UK's first Solar PV Strategy, which set out our ambition for Solar PV in the UK. Central to this is an emphasis on deployment on Commercial and Industrial buildings as well as domestic roof tops, rather than large scale ground-mounted systems.

The solar strategy sets out a number of wide ranging actions which will encourage deployment in this part of the sector.

This information is available in the Renewable Energy Planning Database (REPD), which tracks the progress of all renewable energy projects 0.01MW and over from submission of a planning application through to determination and generation:

https://restats.decc.gov.uk/app/reporting/decc/monthlyextract

I would like to apologise on behalf of the Department of Energy and Climate Change for the delay in replying to the Hon Member for Sunderland Central. My hon. Friend the Minister of State for Energy has since responded to this letter on 1 April 2014.

In 2013 5MW of solar photovoltaic (across 10 installations) was installed under the 250-5MW FIT band. The Central FIT Register, from which these figures are taken, does not contain information on whether these installations are located on roof tops or ground mounted but all schemes under this tariff band will be wired to provide electricity to a building.

However the government is actively focused on unlocking to deployment in the mid-sized market. Our current estimates suggest that around 20-230MW may be deployed in the 250-5000kW tariff band in 2014; this range reflects the uncertainties described above.

DECC Ministers meet regularly with other Ministers to discuss a range of issues.

DECC Ministers meet regularly with other Ministers to discuss a range of issues.

There is no cap on current deployment of onshore wind (or any other renewable energy technology). It is the role of the planning system to ensure that wind farms are only built where the impacts are, or can be made, acceptable.

Onshore wind is one of the cheapest forms of large-scale renewable energy – supporting onshore wind in 2013 added around £9 per year to the average UK energy bill. Since 2010 DECC has recorded announced investments by developers in onshore wind totalling around £4.6 bn, with the potential to support over 7,700 jobs; and, around the UK, onshore wind developments are providing community funds and other benefits to local people, such as money off electricity bills.