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RES-E Policy in the United Kingdom

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The United Kingdom of Great Britain and Northern Ireland is made up of three separate but overlapping jurisdictions: England and Wales (grouped as one jurisdiction for electricity policy), Scotland and Northern Ireland. Devolution has created greater political independence for both Scotland and Northern Ireland, but energy policy has remained a national competence determined by the Department of Trade and Industry (DTI) since the closure of the Department of Energy in 1992. As far as RES-E is concerned, the Department of the Environment (Department for Environment, Food and Rural Affairs – DEFRA – since 2001) also shares some competence with the DTI (e.g. planning system, biomass and waste policy, climate change policy). The implementation of the RES-E policy for Scotland and Northern Ireland is the responsibility of the devolved bodies. Consequently, specific Orders have been adopted in Scotland and Northern Ireland for the implementation of the Non-Fossil Fuel Obligation (NFFO) in the 1990s and the Renewables Obligation (RO) since 2002. However, they did not differ significantly from the England and Wales Orders. The following chapter focuses on England and Wales, and this for three reasons: England and Wales represent by far the largest jurisdiction in the UK, it provided a model for electricity reform in the other jurisdictions in the 1990s, and the RES-E policies in Scotland and Northern Ireland have been very similar to the England and Wales one since the 1990s with comparable NFFO and RO schemes. Finally, the local authorities have a significant influence on the implementation of the UK RES-E policy due to their responsibility to grant the planning permits.

The British energy policy was dominated by the priority to fossil fuels (domestic coal, oil and gas) and nuclear power until the end of the 1990s. In addition, the privatisation process that started at the beginning of the 1980s, progressively covered all energy sectors by the end of the 1990s, with the privatisation of the nuclear industry as the last energy privatisation in 1996. In this context, the promotion of RES-E had not been a priority of the British government until the beginning of the 2000s, when the climate change issue and the reduction of the CO2 emissions became an increasing political concern under the new Labour government. In terms of RES-E policy instruments, the NFFO contracts introduced the first financial support to RES-E on the electricity market from 1990, but it did not prove very successful in the end due to numerous obstacles in the system itself (priority to nuclear power, low premium prices, bidding procedure) and in the overall context (e.g. electricity pool market, planning permits). With the arrival of the Labour government in 1997 and the increased concerns about the climate change issue, the development of RES-E in the UK gained more political priority and new policy instruments were adopted to support the RES-E generators (RO, CCL, investment grants). However, even if the British government seems to have initiated a substantial change in its RES-E policy since the end of the 1990s, its ambitions remain very limited compared to the huge opportunities of the UK in terms of RES-E potential.

Document Type: Research Article


Publication date: January 1, 2008

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