We face two long-term energy challenges: The policy also recognises that the UK will need around 30–35 GW of new electricity generation capacity over the next two decades as many current coal and nuclear power stations, built in the 1960s and 1970s, reach the end of their lives and are set to close.

The Government's response to the consultation conclusions, published in January 2008, state "set against the challenges of climate change and security of supply, the evidence in support of new nuclear power stations is compelling."

[4] In 2017, the percentage of electricity supply derived from primary energy sources was as follows:[4] In November 2015, it was announced by the UK Government that all coal fired power stations would be closed by 2025.

United Kingdom space and hot water heating consume a greater share of end use compared to the US and more mild southern European or tropical climates.

Such influence is exerted through taxation (such as North Sea Oil Tax[24]), subsidy (such as the Renewables Obligation), incentives, planning controls, the underwriting of liabilities (such as those carried by the Nuclear Decommissioning Authority), grants, and funding for research.

It also found that energy prices tended to rise in response to wholesale cost increases more quickly than they fell with decreases, and that competition was weakened by significant barriers that were preventing new suppliers from entering the market.

[29] The Coalition Government elected in 2010 published their own white paper on energy in 2011, which focused on decarbonisation and security of supply, but which backed Ofgem's findings and proposed reforms.

[41] In the run-up to the 2017 general election, Prime Minister Theresa May made a commitment that the Conservative Party manifesto would include a policy to apply price controls to energy bills.

The Domestic Gas and Electricity (Tariff Cap) Bill 2018 was introduced in legislation and had its first reading on 26 February 2018, following a period of pre-legislative scrutiny from the cross-party Business, Energy and Industrial Strategy Select Committee.

[75] The £400 discount would be paid to domestic electricity customers in England, Scotland and Wales as six monthly rebates (or vouchers for non-smart prepayment meters) of £66 or £67, from October 2022 to March 2023 inclusive.

Comparable support would be offered to businesses, public sector organisations (under a six-month scheme running to 31 March 2023) and to households who do not pay directly for electricity or mains gas, such as those in park homes or on heat networks.

[78] On 17 October, cost-saving measures indicated by incoming chancellor Jeremy Hunt included limiting universal assistance to six months, ending on 1 April 2023, with support beyond then to be determined by a Treasury-led review.

Nonetheless, most of the policies were a continuation of business as usual, with emphasis on market-led solutions and an expectation that consumers act rationally, for example in installing energy efficiency measures to make running cost savings.

[89] Introduced in 2005, it provides a mechanism through which the European price of carbon can be gradually increased to take into account negative externalities, such as the social and environmental impact of emissions, which would not normally be considered.

[89] The target level chosen by the Government must be high enough to provide a strong signal to investors that low-carbon electricity generation represents a secure, long-term investment.

[89] For these reasons, the introduction of a Carbon Floor Price is insufficient on its own to deliver sufficient investment and is supplemented by a proposed change in the support mechanism for low-carbon generation to a form of Feed-in tariff, discussed below.

As a result, plans to build a new generation of nuclear power plants were delayed while the UK Government reran the consultation process in a way that complied with the court's decision.

The challenge is to secure the heat, light and energy we need in homes and businesses in a way that cuts the amount of oil, gas and electricity used and the carbon dioxide emitted.

[citation needed] In a statement to the Scottish Parliament, Energy Minister Jim Mather stated "Members will be aware that Greenpeace, backed by the courts, have forced the UK Government to consult properly on the future role of nuclear power.

[96] With its passing the United Kingdom became the first country in the world to set such a long-range and significant carbon reduction target into law, or to create such a legally binding framework.

In April 2009 the Government set a requirement for a 34% cut in emissions by 2020, in line with the recommendations of the Committee on Climate Change, and announced that details of how this would be achieved would be published in the summer.

As a result, by 2020 is it envisaged that:[100] The Government’s proposals for electricity market reform, published in a White Paper in July 2011, included three initiatives to encourage decarbonisation of electricity generation in the UK: A Carbon Price Floor to complement the European Union Emissions Trading Scheme (EU ETS); Feed-in tariffs which will eventually replace the Renewables Obligation; and an Emissions Performance Standard to restrict future use of the most carbon-intensive forms of generation.

[89] The paper contained three proposals designed to encourage decarbonisation of the UK electricity sector, the rationale behind the introduction and potential impacts of a Carbon Price Floor, Feed-in tariffs and an Emissions Performance Standard are discussed in turn below.

[102] Modelling of future deployment scenarios indicates that a significant contribution would be required from less mature technologies which lacked sufficient incentive to develop into feasible alternatives under the original Renewables Obligation scheme.

[89] In addition to reforming the support mechanism, the Government is simultaneously taking steps to address other barriers to deployment, such as delays caused by the planning system and availability of grid connections.

An Emissions Performance Standard is deemed to be required in the event that the market incentives detailed above are not sufficient in themselves to steer the electricity sector away from the most carbon intensive forms of generation.

The level at which the EPS is set recognises that fossil fuel generation currently still has an important role to play in ensuring security of supply, providing stable base-load and flexibility, whilst at the same time retaining consistency with decarbonisation objectives by preventing the construction of new coal-fired power stations without carbon capture and storage technology and maintaining affordable electricity prices.

The committee recommended investment in energy storage on the supply side and in efficiency technologies that smooth out demand peaks, by switching devices off and on and running them at lower power during times of stress, for example.

[128] Reducing occurrence of fuel poverty (defined as households paying over ten percent of income for heating costs) is one of the four basic goals of UK energy policy.

In the prior decade substantial progress has been made on this goal,[citation needed] but primarily due to government subsidies to low-income families rather than through fundamental change of home design or improved energy pricing.