Recommendations & Conclusions
20 items
1
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The UK is experiencing its biggest energy crisis since the 1970s following major geopolitical instability during a year of worryingly extreme weather. Gas markets look likely to remain volatile for the foreseeable future and the UK remains exposed economically to oil and gas supply restrictions because of its continued dependence …
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The UK is experiencing its biggest energy crisis since the 1970s following major geopolitical instability during a year of worryingly extreme weather. Gas markets look likely to remain volatile for the foreseeable future and the UK remains exposed economically to oil and gas supply restrictions because of its continued dependence on fossil fuels.
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Government response AI summary
The government acknowledges the Environmental Audit Committee’s report and notes the machinery of government change and the contributions from various departments and the North Sea Transition Authority (NSTA).
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2
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The UK has become used to reliable global energy markets providing a large proportion of its energy needs. Vladimir Putin’s apparent weaponisation of gas supplies has shown that the physical accessibility of energy supplies remains a crucial policy consideration, at least in the short to medium term. The UK Government …
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The UK has become used to reliable global energy markets providing a large proportion of its energy needs. Vladimir Putin’s apparent weaponisation of gas supplies has shown that the physical accessibility of energy supplies remains a crucial policy consideration, at least in the short to medium term. The UK Government needs to ensure that citizens and businesses have access to secure and affordable energy while at the same time doing its fair share towards limiting global temperature increase to 1.5°C, in line with its common, but differentiated responsibilities as a signatory to the Paris Agreement and the Glasgow Climate Pact.
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Government response AI summary
The government welcomes the Environmental Audit Committee’s report and provides context for the response, including mentioning the machinery of government change and contributions from other departments.
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3
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Whilst the UK continues to be committed to phasing out the use of coal for electricity generation by 2024, the Government has recently announced its intention to allow the opening of a new coal mine at Whitehaven in Cumbria. The coking coal to be mined there has limited application in …
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Whilst the UK continues to be committed to phasing out the use of coal for electricity generation by 2024, the Government has recently announced its intention to allow the opening of a new coal mine at Whitehaven in Cumbria. The coking coal to be mined there has limited application in the UK steel industry, and 85% of the coal is planned for export to Europe. The UK Government needs to consider the impact of this decision on its ability to exert international influence with regard to the phasing out of unabated coal.
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Government response AI summary
The government acknowledges the committee's concern and reiterates its commitment to phasing out unabated coal for electricity generation by 2024, stating that any decision on a new coal mine is independent from this commitment and follows established planning policy.
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4
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Climate breakdown threatens lives, livelihoods and infrastructure, and taking steps to ensure continued climate stability must be a national security priority for any government. The increasing frequency and ferocity of extreme weather events, floods, droughts and heatwaves which is manifest at the current 1.1°C average heating should serve as an …
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Climate breakdown threatens lives, livelihoods and infrastructure, and taking steps to ensure continued climate stability must be a national security priority for any government. The increasing frequency and ferocity of extreme weather events, floods, droughts and heatwaves which is manifest at the current 1.1°C average heating should serve as an alarm call. The impact that these weather extremes can have on national infrastructure has recently been all too apparent: there were striking examples of energy generating facilities across Europe being affected by the heatwave and drought in the summer of 2022. The world is currently on track to exceed the 1.5°C threshold that the Paris Agreement was intended to prevent.
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Government response AI summary
The Government recognizes that climate change and biodiversity loss pose risks to lives, livelihoods, national security, and infrastructure, and highlights its commitment to tackling these challenges through action and its net zero emissions target by 2050. It is also investing in climate adaptation measures.
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5
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Tackling the immediate energy security and affordability issues caused by the war in Ukraine does not entail abandoning climate ambitions or putting them on pause. The energy trilemma can be solved by tackling all three issues together. There are many opportunities to achieve synergies between affordability, security and sustainability. Accelerating …
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Tackling the immediate energy security and affordability issues caused by the war in Ukraine does not entail abandoning climate ambitions or putting them on pause. The energy trilemma can be solved by tackling all three issues together. There are many opportunities to achieve synergies between affordability, security and sustainability. Accelerating the transition away from fossil fuels will enhance the UK’s energy security and reduce the ability of aggressive or repressive regimes to use oil and gas supplies as an economic weapon. It will also help to protect households from volatile fossil fuel prices permanently and will reduce the fiscal burden of financial support to households through this and any future energy crisis. (Paragraph 40) Accelerating the transition from fossil fuels and securing energy supplies 81 The British Energy Security Strategy
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Government response AI summary
The government agrees that energy security and climate ambitions are compatible and that transitioning away from fossil fuels is the best way to enhance energy security. They highlight existing progress in decarbonising the economy and improving energy efficiency.
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6
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The Government acted swiftly to publish a British Energy Security Strategy following the invasion of Ukraine and the resulting gas supply crisis. We commend it on its rapid response. The Strategy has some merits. Its ambition on decarbonising the electricity system is welcome, and it sets strong and stretching targets …
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The Government acted swiftly to publish a British Energy Security Strategy following the invasion of Ukraine and the resulting gas supply crisis. We commend it on its rapid response. The Strategy has some merits. Its ambition on decarbonising the electricity system is welcome, and it sets strong and stretching targets for the roll- out of low-carbon electricity generation in the coming decade. (Paragraph 46
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Government response AI summary
The government welcomes the Committee’s recognition of the merits of the British Energy Security Strategy and states that it sets out a comprehensive plan to boost energy security, reduce reliance on fossil fuels, and accelerate the transition to a clean energy system.
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9
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Poor implementation has been a recurring issue for energy efficiency schemes for owner occupiers in England, which has undermined confidence among consumers and contractors. The Green Deal failed to offer sufficiently attractive loans to incentivise large scale take up. More recently, the Green Homes Grant was administered shambolically. The scale …
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Poor implementation has been a recurring issue for energy efficiency schemes for owner occupiers in England, which has undermined confidence among consumers and contractors. The Green Deal failed to offer sufficiently attractive loans to incentivise large scale take up. More recently, the Green Homes Grant was administered shambolically. The scale of the current fossil fuel price shock crisis requires a rapid acceleration of energy efficiency measures and a commitment to effective delivery.
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Government response AI summary
The government acknowledges the need for improving energy efficiency and states its commitment to achieving net zero carbon emissions by 2050 and reducing the UK’s final energy consumption from buildings and industry by 15% by 2030 against 2021 levels through the Energy Efficiency Taskforce (EETF).
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13
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
In response to the Committee’s report on Energy Efficiency of Existing Homes, published in March 2021, the Government said that it was considering what further action might be required to catalyse the market for a wide range of attractive and low-cost green finance products. Yet it said that the variation …
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In response to the Committee’s report on Energy Efficiency of Existing Homes, published in March 2021, the Government said that it was considering what further action might be required to catalyse the market for a wide range of attractive and low-cost green finance products. Yet it said that the variation of stamp duty rates to incentivise green mortgages was not being considered, as to do so would risk the Exchequer’s revenue. We recommend that the Government direct the Energy Efficiency Taskforce to seek stakeholder views on how variations to the rate of stamp duty could be used to progressively incentivise energy efficiency improvements without jeopardising tax revenues.
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Government response AI summary
The government is prioritizing catalysing the market for Green Finance, citing the Green Home Finance Innovation Fund and the Green Home Finance Accelerator programme, and notes that the Energy Efficiency Taskforce will advise on stimulating investment.
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18
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
On the supply side, we welcome the clear and ambitious targets that the Government has set in the Energy Security Strategy for the roll out of low-carbon electricity generation. We are concerned that the Government is not doing enough to remove the barriers preventing the cheapest and quickest onshore low-carbon …
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On the supply side, we welcome the clear and ambitious targets that the Government has set in the Energy Security Strategy for the roll out of low-carbon electricity generation. We are concerned that the Government is not doing enough to remove the barriers preventing the cheapest and quickest onshore low-carbon technologies from being rapidly deployed. A number of witnesses have raised the challenges that low-carbon generators face in securing appropriate grid connections and how to manage latency in certain types of renewables. These are clearly significant issues, which the committee may wish to consider in the future.
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Government response AI summary
The government states that it will bring forward retail market reforms, that will deliver a market that works for consumers and supports system transformation. To achieve power decarbonisation by 2035 and support energy independence it will work across government.
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21
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
As an island nation the UK has abundant tidal energy resources that could be tapped, yet tidal technologies received scant attention in the British Energy Security Strategy. We have been told that tidal range energy projects are now capable of being delivered at a similar overall cost to nuclear and …
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As an island nation the UK has abundant tidal energy resources that could be tapped, yet tidal technologies received scant attention in the British Energy Security Strategy. We have been told that tidal range energy projects are now capable of being delivered at a similar overall cost to nuclear and offshore wind. Tidal stream and tidal range technologies have the significant benefit that tidal flows are entirely predictable and can therefore deliver a consistently reliable year-round source of clean electricity.
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Government response AI summary
The government welcomes the inclusion of tidal power in Contracts for Difference auctions and recognizes the potential of tidal stream and tidal range technologies to deliver a reliable source of renewable energy.
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22
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
We welcome the inclusion of tidal power in Contracts for Difference auctions which has resulted in 40MW of clean power from tides being awarded contracts. Tidal and other marine energy projects should be a vital component of the Government’s strategies for delivering both net zero and energy security. Tidal and …
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We welcome the inclusion of tidal power in Contracts for Difference auctions which has resulted in 40MW of clean power from tides being awarded contracts. Tidal and other marine energy projects should be a vital component of the Government’s strategies for delivering both net zero and energy security. Tidal and other marine energy projects should be a vital component of the Government’s strategies for delivering both net zero and energy security. We recommend that the Government incorporate, as part of the revised net zero strategy to be published by March 2023, an approach to developing tidal and marine energy that includes a stated ambition for the sector set out in gigawatts of generating capacity. The UK should be aiming to generate a significant proportion of its power from these sources by the middle of the 2030s. This approach must be extremely sensitive to biodiversity considerations given the obvious risks of disrupting important habitats, and the Government should make this clear in planning guidance.
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Government response AI summary
The government welcomes the inclusion of tidal power in Contracts for Difference auctions and recognizes the potential of tidal stream and tidal range technologies to deliver a reliable source of renewable energy.
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23
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
The British Energy Security Strategy appears to reflect a 20th century approach to energy security, prioritising the construction of big, centralised power generation facilities to meet fixed demand. A move to a smarter, more flexible, digitally-enabled grid, which technological innovations now make possible, holds exciting potential to smooth demand peaks …
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The British Energy Security Strategy appears to reflect a 20th century approach to energy security, prioritising the construction of big, centralised power generation facilities to meet fixed demand. A move to a smarter, more flexible, digitally-enabled grid, which technological innovations now make possible, holds exciting potential to smooth demand peaks by flexing demand up and down in a way that was hitherto impossible. Developments in this area could have important implications for other elements of the Government’s energy strategy - for instance, how much baseload electricity is necessary and how much grid distribution capacity is needed to connect a more dispersed generation network. We recommend that the Government provides a progress report in 2023 on the joint Ofgem and BEIS Smart Systems and Flexibility Plan and incorporates any relevant actions from this report into its ongoing efforts to enhance energy security and decarbonise the electricity grid.
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Government response AI summary
The government recognizes the importance of a smart, flexible energy system, and that Ofgem has been working with industry to develop new grid codes and standards and it will bring forward retail market reforms to support system transformation to achieve power decarbonisation by 2035.
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28
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The Department for Business, Energy and Industrial Strategy has overall responsibility for net zero delivery, but the gaps in its British Energy Security Strategy suggest that it is failing to drive the departments responsible for other high emitting sectors, such as transport and buildings, to accelerate their own contribution to …
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The Department for Business, Energy and Industrial Strategy has overall responsibility for net zero delivery, but the gaps in its British Energy Security Strategy suggest that it is failing to drive the departments responsible for other high emitting sectors, such as transport and buildings, to accelerate their own contribution to energy security and the reduction of greenhouse gas emissions.
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Government response AI summary
The government says DESNZ and DLUHC work closely together, and they remain committed to meeting the net zero emissions target by 2050. They describe current building standards and the Future Homes Standard, and refer to the Transport Decarbonisation Plan.
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29
Recommendation
4th Report - Accelerating the transitio…
Acknowledged
In light of the Prime Minister’s confirmation at the Despatch Box to the Chair of this committee that he will personally drive cross-government action on climate change, we recommend that the Prime Minister directs the Secretary of State for Business, Energy and Industrial Strategy to work with his counterparts in …
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In light of the Prime Minister’s confirmation at the Despatch Box to the Chair of this committee that he will personally drive cross-government action on climate change, we recommend that the Prime Minister directs the Secretary of State for Business, Energy and Industrial Strategy to work with his counterparts in the Department for Levelling Up, Housing and Communities and the Department for Transport to seek further contributions from their departments to the national effort to enhance the UK’s energy security and reduce energy wastage. This cross-government work on energy security should inform the new and revised Net Zero Strategy that the Government is required to publish by March 2023. We further recommend that these Departments contribute to a comprehensive update to the British Energy Security Strategy in the spring of 2023. In that update the Government should indicate its progress in reducing direct and indirect reliance on Russian imports, securing energy supplies and improving energy efficiency. (Paragraph 140) North Sea oil and gas in transition
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Government response AI summary
The government says that DESNZ and DLUHC work closely together on climate change policy areas and highlights the Future Homes Standard and Building Regulations. A Transport Decarbonisation Plan exists and will be updated within 5 years.
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30
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Vladimir Putin’s aggression in Europe, and the energy crisis that it has provoked, provides a new impetus to accelerate the transition away from polluting fossil fuels. Driving this transition through greater investment in energy efficiency and low- carbon technologies enhances energy security, protects households from fossil fuel price volatility permanently, …
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Vladimir Putin’s aggression in Europe, and the energy crisis that it has provoked, provides a new impetus to accelerate the transition away from polluting fossil fuels. Driving this transition through greater investment in energy efficiency and low- carbon technologies enhances energy security, protects households from fossil fuel price volatility permanently, saves public money and cuts climate-changing emissions. (Paragraph 175) 86 Accelerating the transition from fossil fuels and securing energy supplies
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Government response AI summary
The Government agrees that accelerating the transition from fossil fuels and securing energy supplies are vital for enhancing energy security, protecting households from fossil fuel price volatility, saving public money and cutting climate-changing emissions.
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31
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
During this transition the UK must nevertheless continue to be able to access oil and gas to ensure that the country can continue to heat its homes, fuel its transport and generate a declining proportion of power. We have found consensus on the overarching need to accelerate the transition from …
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During this transition the UK must nevertheless continue to be able to access oil and gas to ensure that the country can continue to heat its homes, fuel its transport and generate a declining proportion of power. We have found consensus on the overarching need to accelerate the transition from fossil fuels, and the recommendations of this report reflect that. We have different views on the speed with which domestic oil and gas production may need to be phased out and on whether continued oil and gas licensing in the UK is necessary to ensure the country’s energy security, given the current geopolitical tensions. In theory, the UK’s domestic carbon budgets and its Nationally Determined Contribution targets could still be met if some new UK fields were licensed and developed. We also note that the IEA’s World Energy Outlook 2022 reiterates that new supplies create a ‘clear risk’ to the 1.5°C target.
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Government response AI summary
The Government agrees that during the transition the UK must nevertheless continue to be able to access oil and gas to ensure that the country can continue to heat its homes, fuel its transport and generate a declining proportion of power.
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37
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Offshore oil and gas workers have many of the skills that will be needed elsewhere in the economy as the UK accelerates the energy transition. It is vital that Government works with training bodies, unions and the industry to offer adequate support in the transition to retrain and reskill for …
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Offshore oil and gas workers have many of the skills that will be needed elsewhere in the economy as the UK accelerates the energy transition. It is vital that Government works with training bodies, unions and the industry to offer adequate support in the transition to retrain and reskill for jobs in the net zero economy. The industry predicts that 45,000 jobs will be lost in oil and gas by 2030, but the North Sea Transition Deal has placed no commitments on companies to support workers in reskilling for new opportunities in the new offshore low-carbon economy. Stakeholders have also raised concerns that workers are currently having to fund their own retraining.
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Government response AI summary
The Government recognizes the importance of a skilled workforce and is working with industry, trade unions, training providers to support workers to reskill, citing the North Sea Transition Deal commitment to create a people and skills plan, investment in skills and training programmes, and a …
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42
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
Oil and gas companies have understandably complained of the impact on the certainty of their revenue projections arising from sudden changes in the fiscal regime applying to their operations. But these are exceptional times. It would be politically and morally unacceptable for oil and gas companies to pocket record profits …
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Oil and gas companies have understandably complained of the impact on the certainty of their revenue projections arising from sudden changes in the fiscal regime applying to their operations. But these are exceptional times. It would be politically and morally unacceptable for oil and gas companies to pocket record profits because of a war at a time when an unprecedented number of households in the country have been plunged into fuel poverty. The Government was therefore right to introduce its Energy Profits Levy, which is contributing towards the support the Treasury is offering billpayers.
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Government response AI summary
The government introduced and increased the Energy Profits Levy (EPL) to address exceptional profits being made by oil and gas companies, and recognizes the impact on the oil and gas industry while believing it is necessary to ensure they pay their fair share of tax.
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43
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The original 65% tax rate under the Energy Profits Levy was lower than the international average tax rate of oil and gas producers (of 71%), so we welcome the Chancellor of the Exchequer’s proposal to increase this rate to 75%, while noting that it remains below Norway’s tax rate of …
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The original 65% tax rate under the Energy Profits Levy was lower than the international average tax rate of oil and gas producers (of 71%), so we welcome the Chancellor of the Exchequer’s proposal to increase this rate to 75%, while noting that it remains below Norway’s tax rate of 78%.
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Government response AI summary
The government acknowledges the committee's welcome of the increase to the Energy Profits Levy and states the changes will bring the overall tax rate for oil and gas companies to 75%, in line with the international average.
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45
Conclusion
4th Report - Accelerating the transitio…
Acknowledged
The tax system should help, not hinder, the transition to a low-carbon economy. The original way in which the Investment Allowance was structured provided a perverse incentive to accelerate investment in high-carbon oil and gas installations at a time when the public policy imperative was to accelerate the transition away …
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The tax system should help, not hinder, the transition to a low-carbon economy. The original way in which the Investment Allowance was structured provided a perverse incentive to accelerate investment in high-carbon oil and gas installations at a time when the public policy imperative was to accelerate the transition away from fossil fuels. We welcome the modest change introduced by the Chancellor to limit the 80% Investment Allowance to investment expenditure on upstream decarbonisation, while having significant reservations about the extent of the financial support the Treasury is providing via the Investment Allowance, which Accelerating the transition from fossil fuels and securing energy supplies 89 the Institute for Fiscal Studies has noted ‘means that North Sea investment will be massively subsidised’ and ‘could lead to loss-making investments being rendered commercial’.
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Government response AI summary
The government acknowledges that the tax system should support the transition to a low-carbon economy and highlights changes made to the Investment Allowance to target investments that reduce emissions from oil and gas production.
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