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Clean Growth Strategy: Energy

We take an in-depth look at the energy implications of the government’s landmark Clean Growth Strategy, which promises new action on technology innovation, energy efficiency and renewables.

We take an in-depth look at the energy implications of the government’s landmark Clean Growth Strategy, which promises new action on technology innovation, energy efficiency and clean power.

Published on 12 October, the government’s Clean Growth Strategy sets out 50 policies and plans for innovation spending, low carbon transport, improving efficiency in homes and businesses, supporting clean power and protecting natural resources.

Energy efficiency

Among the new policies is a commitment to support businesses to improve energy productivity by at least 20 per cent by 2030. The government intends to launch a full consultation in early 2018 to decide on the type of support required to achieve this goal.

From 2019, government will also be introducing a more streamlined energy and carbon reporting framework for larger businesses, building on the Energy Savings Opportunity Scheme (ESOS), and has launched a consultation for feedback. 

Large businesses will also benefit from an ‘Industrial Energy Efficiency’ scheme from 2019 to help them implement energy efficiency measures. 

New ‘decarbonisation action plans’ for the most energy-intensive sectors - cement, ceramics, chemicals, food and drink, glass, oil refining, pulp and paper - have also been published.

Meanwhile, a consultation has been launched on an £18 million programme to help industry identify and invest in opportunities for recovering and reusing waste heat from industrial processes, which the government hopes will encourage firms to re-use heat onsite or sell it to third parties.

For the public and higher education sectors, a separate consultation has been been launched to develop new ways to cut energy bills and carbon emissions, which will include a voluntary emissions target.

To support the above goals, the government is calling for feedback on how it best goes about building a successful market for energy efficiency. It has also opened a consultation on integrating businesses and new efficiency measures under a revamped Green Deal scheme, which closed in 2015.

Clean power

The strategy reaffirms a previously announced ambition to end the use of unabated power generation from coal by 2025, and also promises £557 million in subsidies for new large-scale clean power, focusing mainly on offshore wind farms.

An update on the future of the Feed-in Tariff (FiT) subsidy scheme for smaller-scale domestic and commercial clean power will be provided by the end of 2017. The FiT scheme is currently due to expire in 2019. 

In terms of heating, the strategy suggests that government intends to focus its efforts on phasing out the use of fossil fuel heating in properties off the gas grid once the Renewable Heat Incentive (RHI) for low carbon heating technologies expires in 2021. 

Innovation funding

The innovation funding set out in the Clean Growth Strategy amounts to £2.5 billion in public spending from 2015 to 2021, much of which focuses on energy.

It includes £505 million from the government’s Energy Innovation Programme, which among other areas includes up to £10 million for low carbon heating, £10 million for energy efficiency in buildings, £20 million for carbon capture technology, £20 million for fuel switching in industry, and a £14 million boost to the existing Energy Entrepreneurs Fund.

A wider summary of the Clean Growth Strategy is available here.