Government Policy & Statements


The energy policy of the United Kingdom was set out in the Energy White Paper of May 2007 and Low Carbon Transition Plan of July 2009, building on previous work including the 2003 Energy White Paper and the Energy Review Report in 2006. It was led by the Department of Energy and Climate Change, then headed by Amber Rudd (the DECC was disbanded on 14 July 2016). The current focus of policy are on reforming the electricity market, rolling out smart meters and improving the energy efficiency of the UK building stock through the Green Deal.

The current paper can be found here;- Government Energy Policy

Though energy policy is an area reserved to the UK government, under the Scotland Act 1998 that established devolved government for Scotland, the Scottish Government has an energy policy for Scotland at variance with UK policy, and has planning powers to enable it to put some aspects of its policy priorities into effect.


Background to Past Government Policy


The Department of Energy and Climate Change (DECC) has referred to solar photovoltaics (PV) as being ‘key technology’ in the UK’s future power mix in its updated Renewable Energy Roadmap released at the end of December 2012. DECC’s official recognition of solar power’s importance has been a cause for celebration among those in the solar industry as well as those who have made the choice to invest in solar in the UK. The news comes after a year of unprecedented growth and falling costs for installed solar PV system capacity across the country.


The DECC could apparently no longer ignore the phenomenal and sudden expansion in the UK’s solar industry. Driven mainly by the UK’s feed-in tariff (FiT) and the falling cost of PV technology, solar power has begun to find its place in UK homes and businesses, with installed solar PV capacity increasing 5-fold in the space of a year.

The DECC update report stated that Solar photovoltaics (solar PV) recorded the highest growth with a five and a half times increase in capacity to 1.4GW by the end of June 2012 compared to June 2011. Solar PV was now identified as a key technology in this Renewable Energy Roadmap Update (the Update) as costs had fallen dramatically and deployment increased markedly.

DECC has projected that UK installed solar capacity could grow to as much as 22 gigawatts (GW) by 2020 provided incentive and market conditions were accommodating. Utility and electricity network companies, however, would need to change in order to handle the new decentralised generation capacity, which unlike conventional power plants cannot be ramped up and down at will. To help solar PV grow smoothly and in anticipation of the changes that such levels of solar PV will require, DECC planned to publish a Solar Strategy in early 2013.

The strategy would reflect both government and industry perspectives as to the main challenges facing the deployment of solar PV. It would consider the scope for small-scale, community-owned, commercial and utility scale deployment in the UK and identify the barriers to growth that need to be addressed in each case. It would also consider how industry needs to secure cost reductions over time, and how this can best be monitored to inform the UK’s overall strategy, helping to set out the potential for economic benefit for the UK from industry growth.

The UK’s Solar Trade Association (STA) welcomed the news of solar PV’s inclusion in the roadmap with open arms, especially in light of the erratic feed-in tariff policy changes that had been both a boon and a plague to the UK’s solar industry.

The Renewables Roadmap showed that solar PV was fully recognised as a significant contributor to the UK’s renewables mix. Solar power was going to be a great deal cheaper than CCS (carbon capture and storage) and nuclear in the 2020s. It was therefore absolutely right that solar has its own dedicated strategy, as had gas.


File:World energy consumption.svg - Wikimedia Commons

Courtesy Wikipedia





International Energy Agency

Courtesy iea policies and measures


United Kingdom renewable energy policy framework summary

In 2015 and 2016, there have been a number of changes to renewable energy policies in UK.


Targets and progress

Under the EU Renewable Energy Directive (RED), the UK has a target to source 15% of final energy consumption from renewable energy by 2020. The UK exceeded its 2013/14 interim target under the RED with a 6.3% share of renewables versus its 5.4% target. However, according to the European Commission’s 2015 RED progress report, the UK is projected to fail meeting its 2020 target.

While deployment of renewable electricity capacity had progressed rapidly, renewable heat and transport continue to lag. In 2015, almost 25% of electricity was generated from renewables, a rise of almost 30% from 19% in 2014. Renewables accounted for 4.5% of heat and 4.9% of transport demand in 2014 (most recent data available).


File:Primary energy mix in the United Kingdom, OWID.svg - Wikimedia Commons

Policy changes

Recently, there have been a number of significant changes to renewable energy policy instruments in the UK which will have an impact on deployment levels.


Feed-in tariffs (FITs)

FITs support small scale renewable electricity installations and there has been rapid deployment of solar PV in recent years due to attractive support tariffs. The Government became concerned about the cumulative cost of the scheme and in early 2016 implemented tariff cuts of 65%. As a result, solar PV installations plummeted by 75% in early 2016 compared to the same period in 2015.

The Government has also set quarterly deployment caps for different technologies with the aim to keep overall FIT costs to £100 million per year by April 2019.

Further cuts are being proposed to Anaerobic Digestion (AD) plants from 2017, with the total elimination of tariff support for AD plants above 500 kW.


Renewable Obligation (RO) 

In December 2015, the Government announced that from April 2016, the RO will be closed for new PV projects of 5 MW capacity or below and to any expansions of already existing installation larger than 5 MW. The RO has also been closed for onshore wind installations from April 2016 – a year earlier than previously planned. The RO scheme will be totally closed for new applications as of 1st of April 2017.


Contract-for-Difference (CfD) 

The RO is being replaced by CfDs. The first CfD allocation round took place in October 2014, with results announced in February 2015. The second round was scheduled for October 2015 but was cancelled. Three further CfD rounds were announced in November 2015 to take place by 2020. A consultation was published in May 2016 on the terms of future CfD rounds and round 2 is now expected in late 2016.


Renewable Heat Incentive (RHI) 

The RHI is the world’s first Feed-in-Tariff for renewable heat, introduced in 2011 (non-domestic) and 2014 (domestic). The government announced in late 2015 that the RHI scheme would be extended to 2020/21. The budget is to increase from £430 million in 2015/16 to £1.15 billion in 2020/21.

A number of changes are being made to the RHI, including:

  • The heat demand that can be claimed for (which is deemed) is being reduced, thus cutting the amount of RHI that can be claimed by larger properties.
  • Solar thermal installations will no longer be eligible under the RHI from 2017.


Climate Change Levy (CCL) Since August 2015, renewable electricity generators have been no longer eligible for CCL exemption certificates which provided an additional income stream up to the value of the CCL (currently £5.54/MWh).



Recent policy changes have aimed to reduce the expenditure generated by the renewable energy support programmes and to create a policy framework that allows for better cost and capacity control, as well as to limit consumers’ electricity bills. Multiple policy changes have however created much uncertainty and have reduced the attractiveness of the UK for renewable energy investors.
Courtesy Wikipedia


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