Wednesday, 28 July 2010

The UK government has published what will be an annual statement on energy policy

The UK government yesterday published its first ever Annual Energy Statement.

The document sets out 32 actions of energy and climate change policy, although much of it has already been announced.  From an overall business/IT point of view the main points of interest (mainly for UK readers) are:

• Action 4: ‘Alongside this Statement, the Government and Ofgem (the UK’s electricity and gas market regulator) are together publishing a Prospectus for Smart Meters today’.

The document is here and will be of interest to all those ICT companies looking to get a slice of the action in the coming years. I’ll summarise the details shortly.

• Action 6: ‘We will keep the CRC under review and look at the future of Climate Change Agreements in order to ensure that we deliver significant improvements in energy efficiency with minimal complexity and policy overlap’.

In the detail, the paper says that ‘We will keep the operation of this scheme (CRC) under active review with a particular eye on simplifying it and ensuring it properly incentivises those
who do most to improve energy efficiency. We will aim to introduce changes ahead of the capped phase’.

The comment may well grab the attention of Intellect, the UK IT industry trade body. Intellect has consistently lobbied against the way the CRC is implemented because of its potential negative impact on the ICT sector, both financially and in reputations. Intellect has considered the establishment of a Climate Change Agreement (CCA) because a CCA allows an energy intensive industry sector to opt out of the CRC by negotiating its own carbon reduction targets. But with the CRC still likely to change and CCAs having an uncertain future (and the potential for reform of the Climate Change Levy - CCL) the long-term situation is still not clear.

• Action 8: ‘All 17 central Government Departments now have comprehensive plans in place to meet the 10% reduction target and all have a real-time energy display in place’.

This refers to the additional 10% reduction in emissions that the new government is looking for in its first 12 months in office. Having recently been involved in some research around green IT in the public sector IT, all I can say is that the IT operations had significant reservations about whether they could achieve this target.

• Action 15: ‘In the autumn, the Government will publish proposals to reform the Climate Change Levy in order to provide more certainty and support to the carbon price. Subject
to the outcome of that consultation, the Government intends to bring forward relevant legislation in Finance Bill 2011’.

The Climate Change Levy is basically a commercial energy tax. The CCAs (see above) can get significant discounts on CCL payments through achieving their own carbon reduction targets, so changes to the CCL with have an impact on CCAs.

• Action 16: ‘We are pressing for the EU to move from the current 20% target to a 30% target for GHG emission reductions by 2020’.

This is not new. The EU has proposed the higher target if other countries sign up to equally ambitious targets.

© The Green IT Review

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