The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)

On 27 June, the UK became the first major economy in the world to legislate to reach net zero emissions by 2050.

Achieving this target will require significant changes in the way we produce, deliver and use energy. We will need to harness the power of innovation and new technology to ensure the energy system remains flexible and resilient. We will need to provide confidence to businesses across the country to invest in a greener future by maintaining clear and stable policy frameworks. We will also have to ensure that as we move to cut greenhouse gas emissions across the economy, the security of our energy supplies is never in doubt and energy costs are kept low for all households and businesses.

As we set out on the path to reach net zero emissions, the Government are today outlining a series of important reforms across the energy system. These include new approaches to how low-carbon infrastructure is financed, potential changes to the retail energy market so it works better for all consumers, a new strategy for tackling fuel poverty and significant changes to the way we set the detailed rules that govern the energy system.

Business models for carbon capture usage and storage (CCUS) projects

As we committed to in the CCUS action plan, we are today publishing a consultation on how we can bring CCUS projects to market in the years ahead. This is an important step in order to meet our action plan commitment of delivering the UK’s first CCUS project from the mid-2020s. The consultation seeks views on possible CCUS business models for industry, power, and carbon dioxide transport and storage, as well as a framework to support hydrogen production with CCUS. The consultation sets out the risks that are inherent in first of a kind CCUS projects, and the possible delivery and co-ordination challenges of deploying CCUS at scale. This consultation will be open for responses until 16 September 2019.

The re-use of oil and gas assets for carbon capture usage and storage (CCUS) projects

This consultation fulfils the Government commitment in the CCUS action plan to identify existing oil and gas infrastructure that has the potential for re-use and to develop a policy to support the development of CCUS in the UK. It seeks views on whether Government should introduce a discretionary power for the Secretary of State to remove the decommissioning liability from previous oil and gas asset owners if assets are transferred to CCUS projects; and on changing guidance from the Oil and Gas Authority and Government to encourage owners and operators of oil and gas assets to propose a period of suspension prior to decommissioning in circumstances in which there is a reasonable prospect of the asset being acquired by a CCUS project. This consultation will be open for responses until 16 September 2019.

We are today publishing a five-year review of the capacity market mechanism. This review has found that the scheme is working effectively and performance against the original objectives has been achieved. In considering the future of the scheme, we propose focusing on specific areas of the scheme that will need to change as we maintain security of electricity supply while also moving towards net zero emissions. One of the first steps we propose to take is to implement a restriction on the most polluting types of energy generation, such as coal, within the capacity market by introducing new carbon emissions limits. To implement these changes, we are today issuing a public consultation on carbon emission limits within the scheme. This consultation will be open for responses until 2 September 2019.

Increasing our ambition on improving energy efficiency across the UK energy system will be vital if we are to reach net zero emissions. The electricity demand reduction pilot evaluation we are publishing today has concluded that energy efficiency projects are not yet ready to enter the GB capacity market. We are therefore publishing a call for evidence on market barriers to energy efficiency, and how we can create new markets for energy efficiency and secure its role in the wider energy market. This includes considering how energy efficiency could help reduce the requirement for network reinforcement and help compliment the growth in distributed generation. This call for evidence will be open for responses until 25 September 2019.

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