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Energy policy in transition: evidence from energy supply and demand in the UK

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posted on 2023-06-08, 21:57 authored by Jan Rosenow, Nick Eyre, Darryl Croft
Whilst much of Europe is turning to supplier obligations in order to compel energy companies to deliver energy efficiency improvements, the UK, after 18 years of using such schemes, will from 2013 have a financing scheme as the central delivery mechanism, relying fully on the market rather than government intervention. The remaining supplier obligation will focus on the areas that financing is not expected to fully support: more expensive insulation and help for those with no access to finance. In addition, the publicly funded fuel poverty policy is to be terminated: for the first time since 1978, there will be no taxpayer funded energy efficiency programme for the most vulnerable. These changes represent the biggest shift in the history of energy efficiency policy in the UK since the first and second oil crisis. Yet, despite appeals from many stakeholders, no period of transition will exist between the end of the current and the start of the new policies. The impact is likely to be stark: the expectation is for a dramatic reduction in the delivery of cost-effective energy efficiency measures leading to a big fall in employment and carbon reduction.Plans for the supply-side are equally profound. In order to create a market with greater capacity and to encourage nuclear investment, the Government has unveiled plans for electricity market reform (EMR). For renewable generators, EMR will mark a change in policy support, from a quantity-based green certificate mechanism (the Renewables Obligation) to a price-based feed-in-tariff approach. In contrast to the approach on the demand-side, Government is allowing a three year transition between these schemes. The paper outlines the reasons for the different approaches to policy continuity across the demand and supply side. It highlights what we see as key considerations for policy makers when planning a transition from a supplier obligation to a finance mechanism. We assess the implications of this shift in terms of carbon reduction effort, the industry and fuel poverty.


Publication status

  • Published

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  • Published version

Presentation Type

  • paper

Event name

eceee Summer Study proceedings

Event location

Belambra Les Criques, Toulon/Hyères, France

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Event date

3–8 June 2013

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

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