Utility Week

6 | 1ST - 7TH DECEMBER 2017 | UTILITY WEEK Policy & Regulation This week Smart energy to share £725m strategy fund Industrial strategy white paper identifies clean growth as one of four 'grand challenges' Smart energy systems will receive a slice of a new £725 mil- lion industrial strategy challenge fund, according to a white paper unveiled on Monday. Clean growth is identified as one of the four "grand chal- lenges" in the industrial strategy white paper, published by the Department for Business, Energy and Industrial Strategy (BEIS). The white paper states that a programme to develop smart systems, entitled 'Prospering from the energy revolution', has been earmarked for support from wave two of the £725 million industrial strategy challenge fund. It will include the launch of a programme to support the development of local smart energy systems capable of delivering "cheaper and cleaner energy across power, heating and transport". The wave two programmes are subject to final approval when their business cases have been approved. The white paper says the strategy's long-term goals include ensuring "clean" technologies are cheaper than high-carbon alternatives. It also announces £20 mil- lion of seedcorn support for a new equity fund that will provide patient capital to "strengthen" support for the commercialisation of new clean technologies. And the strategy outlines further support for acceler- ating the drive towards greater uptake of electric vehicles. The white paper also says the government is in "advanced discussions" with the nuclear industry on a sector deal that covers the supply chain, nuclear R&D and skills. DB ELECTRICITY No new low-carbon levies until 2025 The government has signalled there will be no new low-carbon electricity levies until 2025. In its update of the Levy Control Framework (LCF), announced in last week's Budget, the government said the move will shield consumers from increasing energy bills. The Budget states: "In order to protect consumers, the govern- ment will not introduce new low- carbon electricity levies until the burden of such costs are falling." Based on current forecasts, it says this will not happen until the middle of the next decade. The announcement will see all existing commitments respected, including the £557 million allocated for further contracts for difference auctions in the Clean Growth Strategy. ELECTRICITY Dudgeon offshore windfarm exporting The Dudgeon offshore windfarm is now exporting electricity to the grid aer being officially opened by Statoil, Masdar and Statkra. Margareth Ovrum, Statoil executive vice president for technology, projects and drilling, said: "Reducing costs by more than 15 per cent, or £250 million, at Dudgeon and completing the construction phase without any serious incidents is a great achievement by all three partners." Located 40 miles off the coast of Norfolk, the windfarm features 67 turbines with a combined capacity of 402MW. ENVIRONMENT 'Banking' emissions would be 'unwise' Parliament's climate change watchdog has warned the gov- ernment that it would be "very unwise" to "bank" recent carbon emissions reductions to meet long-term targets. Baroness Brown of Cam- bridge, chair of the adaptation subcommittee of the parlia- mentary Committee on Climate Change (CCC), told the Business, Energy and Industrial Strategy select committee last week that the CCC was "particularly con- cerned" about the government's reliance on flexibilities to meet the UK's emissions reductions targets in the fourth and fih carbon budgets, which cover the decade from 2028 onwards. In its Clean Growth Strategy, the government said it planned to "bank" savings made in previ- ous carbon budgets in order to meet later targets. Baroness Brown said this move would be "very unwise", particularly in the light of the increased emission reduction targets set out in the 2015 Paris climate change agreement. In discussions: government and nuclear industry Political Agenda David Blackman "Many of the measures in the white paper are familiar" The long-awaited industrial strategy white paper, published on Monday (27 November), contains a mixture of something new, quite a lot that is borrowed and not much blue. It's not so long ago that the phrase "industrial strategy" was thoroughly out of favour in government circles. Former business secretary Sajid Javid was keen to distance himself from the initiative that his predecessor, the Lib Dems' Sir Vince Cable, had champi- The main new initiative is the unveiling of a new fund for smart systems. However, the bulk of the £725 million pot from which the fund will be drawn has already been allocated. This leaves only about £200 million for smart systems to fight over, with similar funds for agriculture and the ageing society. Of these, only smart systems fall within Clark's Business, Energy and Industrial Strategy remit – the energy sector will have to hope he smiles on his own patch. oned while he held the post. However, following the EU referendum, the concept was back on the agenda with the installation of Javid's successor Greg Clark. As someone who cut his political teeth in the centrist Social Democratic Party in the 1980s, Clark is clearly more com- fortable with an interventionist approach to economic policy than his Thatcherite predecessor. He is so keen on industrial strat- egy that it has been enshrined in his department's name. Many of the measures in the white paper have a familiar ring, having already been trailled in October's Clean Growth Strategy.

• Cover