Decarbonising the power sector

Public Accounts Committee Closed Inquiry
Opened: 30 Jan 2023 Closed: 24 Sep 2023 Parliament page
In October 2021 the Government set a target to decarbonise the power sector by 2035, subject to security of supply. But demand for electricity is expected to increase significantly in that timeframe as other sectors, such as transport and heating in buildings, switch to electricity to reduce emissions. Decarbonising in … Read more
3 Recommendations
20 Conclusions
1 Report
1 Oral session
2 Letters
1 Event
Activity timeline 5 events
24 Sep
2023
Report published
11 Jul
2023
Correspondence
21 Jun
2023
Report published
17 Apr
2023
Correspondence
23 Mar
2023
Oral evidence
Oral evidence sessions 1 session
23 Mar 2023
View on parliament.uk
Decarbonising the power sector
Ashley Ibbett · Department for Business, Energy and Industrial Strategy Jeremy Pocklington CB · Ministry of Defence Jonathan Mills · Department for Energy Security and Net Zero
Title HC No. Published Items Response
Fifty-Ninth Report - Decarbonising the power sector HC 1003 21 Jun 2023 23 Response document linked
Recommendations & Conclusions
23 results
2 Conclusion
Fifty-Ninth Report - Decarbonising…
Provide annual updates to Parliament on progress towards energy objectives and risk mitigation.
We are sceptical that plans for expanding nuclear, solar and wind power are credible. Government has set itself highly challenging electricity generating capacity ambitions for nuclear (24GW by 2050), solar (70GW by 2035) and offshore wind power (50GW by 2030). … Read more
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3 Recommendation
Fifty-Ninth Report - Decarbonising…
Set out plans to provide greater clarity to the private sector for decarbonisation investment.
We are not convinced that government is providing enough clarity to the private sector to attract the investment that is necessary to build infrastructure, spur innovation and drive competition to lower costs. Government estimates that hundreds of billions of pounds … Read more
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4 Recommendation
Fifty-Ninth Report - Decarbonising…
Set out strategies to influence other departments for power sector decarbonisation collaboration.
It is not clear the Department has the support it needs from other departments to achieve government’s power sector decarbonisation ambition. While it holds responsibility for, and takes the lead for achieving energy security and net zero, the Department nevertheless … Read more
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5 Recommendation
Fifty-Ninth Report - Decarbonising…
Publish delivery plan information on decarbonisation cost impact for energy bill payers and taxpayers.
The Department has not yet set out how it expects decarbonising the power sector will impact energy bill payers and taxpayers. While government recognises that initially it will rely heavily on private investment to fund the clean energy transition, the … Read more
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6 Conclusion
Fifty-Ninth Report - Decarbonising…
Write to Committee setting out demand assumptions for energy efficiency and consumer behaviour policies.
We are not yet clear what the Department’s plans are in respect of energy efficiency and consumer behaviour. The Department acknowledges that improving energy efficiency and changing consumer behaviour are key to meeting net zero. However, recent energy bills support … Read more
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1 Conclusion
Fifty-Ninth Report - Decarbonising…
Committee takes evidence from Department on power sector decarbonisation report.
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (the Department) about decarbonising the power sector.1
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7 Conclusion
Fifty-Ninth Report - Decarbonising…
Regulatory system for nuclear energy insufficient to deliver government's ambitious pipeline.
In the last two decades, government has only agreed one nuclear project, at Hinkley Point C.18 The government is now creating Great British Nuclear to help it build capacity and expertise, and a regulatory regime aimed at expanding its nuclear … Read more
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8 Conclusion
Fifty-Ninth Report - Decarbonising…
Offshore wind project pipeline could exceed ambition, but not all expected to succeed.
The Department also told us that it is tracking offshore wind projects at various stages of development that could produce 80GW of electricity when operating, more than its 50GW ambition. However, it acknowledged that not all these projects would succeed. … Read more
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9 Conclusion
Fifty-Ninth Report - Decarbonising…
Uncertainty creates investment hiatus despite billions needed for power sector decarbonisation.
The government estimated in its 2021 Net Zero Strategy that £280 to £400 billion of public and private investment in new generating capacity would be needed by 2037 to decarbonise the power sector. These costs represent the construction costs for … Read more
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10 Conclusion
Fifty-Ninth Report - Decarbonising…
Contracts for Difference mechanism effectively reduced offshore wind costs and spurred investment.
The Department told us that its role is to enable competition to drive innovation and cost reduction, and that the best example of this is how contracts for difference have sustained investment and innovation from the private sector in offshore … Read more
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11 Conclusion
Fifty-Ninth Report - Decarbonising…
Government's ambitious CCUS strategy remains untested at scale despite significant investment
At the 2023 Spring Budget, the Chancellor announced £20 billion for carbon capture, usage and storage (commonly referred to as CCUS).32 However, while providing a signal to the sector and investors, this technology is untested at scale in the UK. … Read more
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12 Conclusion
Fifty-Ninth Report - Decarbonising…
Inconsistent government energy policy undermines investor confidence and hinders decarbonisation progress
More generally, changes in policy direction can affect investor confidence in government.36 Energy policy instability, such as the stop-start nature of some initiatives like the Green Homes Grant Voucher Scheme, which was extended and then abruptly closed, have eroded investor … Read more
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13 Conclusion
Fifty-Ninth Report - Decarbonising…
Department for Energy Security & Net Zero has limited levers to influence other departments
On 7 February 2023, the government announced that the Department for Business, Energy & Industrial Strategy (BEIS) would close, and its responsibilities would transfer to new departments, including the Department for Energy Security & Net Zero (the Department).39 The Department … Read more
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14 Conclusion
Fifty-Ninth Report - Decarbonising…
Skills shortages and planning system issues hinder energy sector decarbonisation progress
The Department has created offshore wind, hydrogen, electricity network, and nuclear champions whose role includes identifying potential risks, barriers and bottlenecks to progress and making recommendations for both the Department and other parts of government where issues cross departmental responsibilities. … Read more
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15 Conclusion
Fifty-Ninth Report - Decarbonising…
Cross-Whitehall collaboration challenged by competing departmental ambitions and long-term skills gaps
The Department told us that it is essential that it builds strong partnerships and collaborative relationships with relevant departments across Whitehall, and that it works with No. 10 and the Cabinet Office to ensure that departments are aligned.48 However, other … Read more
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16 Conclusion
Fifty-Ninth Report - Decarbonising…
Significant investment in power sector lacks clear assessment of spending timelines and funding
While government has estimated that £280 to £400 billion of public and private investment in new generating capacity will be needed by 2037, it has not yet assessed when there may be periods of higher spending and how this will … Read more
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17 Conclusion
Fifty-Ninth Report - Decarbonising…
Nascent technologies for decarbonisation will incur significant costs for taxpayers and consumers
We questioned the Department as to how it is planning to protect consumers and taxpayers from the cost of decarbonising the power sector, particularly when a challenge of proceeding quickly is that deploying nascent technologies before there is a competitive … Read more
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18 Conclusion
Fifty-Ninth Report - Decarbonising…
Long-term consumer bill reductions from renewables seem inconsequential amid high wholesale prices
Although the Department was unable to tell us when bill payers would see lower bills as a result of investment in zero and low-carbon generating infrastructure, it highlighted recent analysis by Ofgem that renewables funded by contracts for difference are … Read more
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19 Conclusion
Fifty-Ninth Report - Decarbonising…
Department exploring fundamental electricity market reform to reduce long-term consumer costs
The Department is also currently considering fundamental market reform of how electricity is bought and sold, through which it hopes to reduce costs of electricity to consumers over the long term. The Department expects reform of the retail market to … Read more
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20 Conclusion
Fifty-Ninth Report - Decarbonising…
Energy bill support schemes prioritise cost reduction over encouraging demand efficiency
Government’s Net Zero Strategy expects a 40% to 60% increase in electricity demand by 2035 as more modes of transport and heating switch to electricity from fossil fuels.61 The Department told us it is expecting a corresponding increase in electricity … Read more
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21 Conclusion
Fifty-Ninth Report - Decarbonising…
EPC rating C requirement implementation faces ongoing cost-effectiveness and affordability debate.
We asked the Department about its plans to encourage consumers, industry and households to invest in greater energy efficiency. It told us that this is an important aspect of its strategy, which includes encouraging short-term demand flexibility from consumers to … Read more
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22 Conclusion
Fifty-Ninth Report - Decarbonising…
Government's energy efficiency initiatives plagued by fragmented, stop-go implementation track record.
In its 2022 Autumn Statement the Chancellor announced new funding of £6 billion from 2025 to 2028 to improve energy efficiency for households, business and the public sector. The Chancellor announced that an Energy Efficiency Taskforce would be charged with … Read more
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23 Conclusion
Fifty-Ninth Report - Decarbonising…
Significant uncertainty remains regarding consumer behaviour change for power sector decarbonisation.
We also asked the Department about how government can influence consumer behaviour. The Department told us that its modelling of power sector decarbonisation by 2035 covers different pathways characterising different assumptions of consumer behaviour and energy efficiency (such as home … Read more
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Correspondence 2 letters
11 Jul 2023 Correspondence from James Armstrong, Managing Partner, Bluefield Partners LLP, re Bluefield Partners LLP submission to Public Accounts Committee inquiry, dated 28 June 2023
Parliament page
17 Apr 2023 Correspondence from Jeremy Pocklington CB, Permanent Secretary, re follow up questions eaised at the Public Accounts Committee on the NAO Office report on Decarbonising the Power Sector, dated March 2023
Parliament page