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UTILITY WEEK | 4TH - 10TH DECEMBER 2015 | 17 Policy & Regulation SPENDING REVIEW IMPACT ON AVERAGE HOUSEHOLD ENERGY BILLS Policy Impact on projected household energy bills (nominal), £ 2016/17 2017/18 2018/19 2019/20 2020/21 New domestic energy efficiency supplier obligation – -32 -33 -33 -34 Proposed reforms to the RO and FITs – -2 -4 -5 -6 Energy-intensive industry exemption from the cost of RO and FiTs, providing certainty to these businesses – +5 +5 +5 +5 Total bill impact per year – -30 -32 -33 -35 "We will continue taking action to keep consumer bills down. We will also double our spending on renewable heat and electricity over the next five years as we invest in new infrastructure fit for the 21st century to ensure our long-term energy security." Amber Rudd, energy secretary "The UK's energy sector has been calling for long-term policy certainty to encourage the scale of investment required to meet the country's energy needs. Last week's statements from the chancellor, along with Amber Rudd's announcement on the future direction for energy generation, helps provide a step in that direction but more detail is required to show how the aims will be supported." Lawrence Slade, chief executive, Energy UK "Our members recognised the need to make savings and presented to Treasury and Decc how we could optimise the RHI budget. A £700 million cut is large, but we look forward to working with the government on reforming this crucial area. We still have a large challenge in hitting our renewable heat targets, and the RHI alone won't achieve it: heat networks, energy efficiency and green gas still have a large part to play." Nina Skorupska, chief executive, Renewable Energy Association "Despite pledging to rebuild Britain, the chancellor has failed to allocate any of the £100 billion infrastructure fund to help rebuild the 21 million British households with poor energy efficiency. What is worse is that he has cut the existing and inadequate funding for energy efficiency under the Energy Company Obligation. This condemns millions to continue living in cold homes, damages our energy security and makes it all but impossible to meet future carbon budgets. It is short-term thinking of the worst kind." Ed Matthew, director, Energy Bill Revolution Reaction Osborne made sure to re-establish the government's plan to set up a Shale Wealth Fund from shale gas revenues, which will see up to 10 per cent of the tax revenues from shale gas spent in local areas. But although shale continues to receive support, for CCS it is the end of the road. In a statement to the London Stock Exchange, Decc confirmed that the £1 billion allocated to building a demonstration CCS facility was being scrapped. The decision, announced just before the Paris climate talks, has drawn criticism from some. So too did the cuts made to energy effi- ciency and renewable heat. The Treasury has pledged to make sav- ings of almost £700 million by 2020/21 despite an increase in funding of £1.15 bil- lion in 2021. And Greenpeace policy direc- tor Doug Parr said the money that will be given to renewable heat is "not new money". "George Osborne announced that spending on renewable energy is to double. This is not new money; its the existing fund for support- ing renewable energy agreed under the coali- tion government," he claimed. Parr also branded Osborne's decision to limit energy efficiency spend "nonsensical". Eco will be replaced by a "cheaper domes- tic energy efficiency scheme", Osborne said. The government will provide £295 million over five years to improve the energy effi- ciency of schools, hospitals and other public sector buildings, but will be scrapping Eco in favour of a cheaper, less ambitious pro- gramme from April 2017. The "new, cheaper" domestic energy effi- ciency supplier obligation will run for five years and improve the efficiency of more than 200,000 homes a year at a lower cost to the consumer, the Treasury said. Naturally, the focus on consumer costs chimes with the Decc energy reset. "As we transition to a low-carbon economy as cost effectively as possible, finding new sources of energy that are cheap, reliable and clean is essential," Rudd said. "Which is why we are boosting our spend- ing on innovation and backing the industries of the future." Source: government figures £4 trillion Spending has been allo- cated by the government over the next five years £8bn Saving on previous fore- cast of spending £10bn Amount of surplus by 2019/20 if spending and revenue raising targets prove accurate. £900m Decc's spending cap for 2016/17 £1.7bn Defra spending cap for 2016/17 BIG NUMBERS