UK chancellor George Osborne made his Autumn spending statement on Wednesday 25th November. To a large extent he chose to kick the economic can down the road once more. But the published documentation has this most interesting section on Energy Policy :
1.201 The government will prioritise energy security, whilst making reforms to meet our climate goals at lower cost. The government is doubling spend on energy innovation, to boost energy security and bring down the costs of decarbonisation.
1.202 As part of this, the Spending Review and Autumn Statement invests at least £250 million over the next 5 years in an ambitious nuclear research and development programme that will revive the UK’s nuclear expertise and position the UK as a global leader in innovative nuclear technologies. This will include a competition to identify the best value small modular reactor design for the UK. This will pave the way towards building one of the world’s first small modular reactors in the UK in the 2020s. Detailed plans for the competition will be brought forward early next year.
There’s more so read on….
1.203 The government will provide an exemption for Energy Intensive Industries, including the steel industry, from the policy costs of the Renewables Obligation and Feed-in Tariffs, to ensure that they have long-term certainty and remain competitive.
1.204 The government will increase funding for the Renewable Heat Incentive to £1.15 billion by 2020-21, while reforming the scheme to deliver better value for money. By the end of the Parliament the government expects to have incentivised enough additional renewable heat to warm the equivalent of over 500,000 homes.
1.205 The government will also continue to make the most of domestic resources and manage our energy legacy safely and responsibly. The government will commit up to 10% of shale gas tax revenues to a Shale Wealth Fund, which could deliver up to £1 billion of investment in local communities hosting shale gas developments, in the north of England and other shale-producing regions. It will also give the Oil and Gas Authority additional powers to scrutinise companies’ offshore decommissioning plans and take action to ensure they represent value for money.
One additional measure not mentioned in the documentation is the scrapping of the £1billion carbon capture and storage (CCS) fantasy fund as reported by the FT .
A £1bn pot of money for a flagship programme to combat climate change has been scrapped in the government’s spending review, stunning companies that have spent years preparing bids for the funds.
The move spells the death knell for a four-year-old contest to build carbon capture and storage systems on power plants and comes just days before Prime Minister David Cameron joins more than 130 world leaders in Paris for a UN conference on a new global climate change accord.
There is a lot to like about this. Prioritising energy security and affordability above climate goals is one measure I have long advocated and therefore strongly support . I have also long advocated nuclear power as the most rational solution to secure, affordable and low carbon generation . Exploring the options for small modular nuclear has the hall mark of Owen Paterson stamped upon it . I would like to know how this money is to be spent and wonder if I could perhaps have some of it?
I will skip over the bit about FITs and ROCs. Suffice to say that I would quite like an exemption too since blogging is incredibly energy intensive. If industry is not to pay FITs and ROCs – who is going to pick up their bill?
One aspect of physics made in Without Hot Air that was highly virtuous was the energy efficiency gains made from electrification and in particular electric heat pumps  . Supporting renewable heat is therefore eminently sensible. It is one of the very few areas where physics appears to give you something for nothing.
Bribing the Northern Power House to accept shale drilling is a strategy that may back fire. The Chancellor should be advised to apply the levy to turnover and not to profit since the latter may never come into being . Readers of this blog will know I am rather sceptical about shale gas in the UK, one reason being, if you roll out 30GW of nuclear then you won’t need it. And I remain unconvinced that rural England will tolerate the industrial scale drilling involved. But what must be prioritised is exploration and appraisal drilling to find out if we have a rich resource or not. At that point we can have a debate about the future.
Getting rid of the insane CCS competition wins the coconut for best policy . One casualty here, however, is that EOR (enhanced oil recovery) may become collateral damage. Flooding oil reservoirs with CO2 is a very good and proven technology. The CO2 does not have to come from CCS. The government, and the new oil and gas authority really ought to properly evaluate this technology that offers a real prospect of significantly boosting UK oil reserves and production. But of course, not at $50 / bbl.
I’ll give George 8 out of 10 for this. Some of the policies do not seem to be properly thought through. We appear to be at an interesting cross roads where many of the Green actors are still in place but 18th century Green Thinking has been replaced by 21st century energy policy. I imagine that the cast will be replaced over time.
Roger suggested I should also work in Amber Rudd’s speech of 18th November. I’ve had a look and it’s not all bad but I find that it lacks the clarity of Osborne’s new direction. The lady needs some better advice that I may just offer.
 HM Treasury SPENDING REVIEW AND AUTUMN STATEMENT 2015
 The Financial Times £1bn carbon capture storage funds scrapped
 Energy Matters Energy Matters’ 2050 pathway for the UK
 Energy Matters Keeping the Lights On
 David MacKay Sustainable Energy Without The Hot Air
 Energy matters What is the real cost of shale gas? (the most read article on this blog with 22,495 reads to date)
 Energy matters Carbon Capture and Storage and 1984