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December Update: Energy and Environment

27 November 2017

Brexit tensions reach new heights this December as the Government presses ahead in its bid to provide industry with some certainty about future business conditions.

Reactions to Chancellor Philip Hammond's Autumn Budget will continue, as the multitude of announcements is scrutinised.

Meanwhile, responses of a different kind will inevitably be brewing within a fractious Conservative Party. While the Budget appeared successful enough to ward off plotting opponents in the immediate sense, the Chancellor's Cabinet foes will be busy cooking up new ways to challenge him.

Here, Andrew Huckle, DeHavilland's Monitoring Consultant for Energy policy, gives you the lowdown on what to watch out for this December.

What's on the agenda this month

by Andrew Huckle, Monitoring Consultant

Reactions to the Budget are likely to dominate the beginning of the month, with the Autumn speech featuring two policies that will set the framework for Britain's decarbonisation policies for the next decade.
 
Firstly, the Levy Control Framework, the envelope for energy subsidy, will be replaced with a new set of measures in the form of the Control for Low Carbon Levies - a system designed to reflect the Government's desire to avoid creating any new low carbon electricity levies until their costs drop.
 
Secondly, in what Carbon Brief dubbed a "cryptic" portion of the Budget document, the Government set out its intention to target a "total carbon price" similar to today's until unabated coal is phased out of the generation mix, but did not offer details of its subsequent intentions.
 
Elsewhere, pre-legislative scrutiny of the Government's energy price cap Bill continues in December, and is expected to be wrapped by January. Only then will it start the usual process for the passage of a Bill.
 
But even before this happens, the energy market is rapidly changing. Suppliers are attempting to pre-empt the legislation by pledging to scrap their expensive Standard Variable Tariffs. The "Big Six" will also become the "Big Five" as Npower and SSE attempt to merge their consumer arms together.
 
All in all, December looks set to be another interesting month for an industry that is in a near constant state of flux.

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Andrew Huckle, Monitoring Consultant
Andrew Huckle
Monitoring Consultant

Andrew Huckle is DeHavilland's dedicated Monitoring Consultant for Energy and Environmental Policy. A graduate of the University of Leicester and King's College London, where he read International Studies and European Studies respectively, he has previously worked as a Parliamentary Research Assistant and completed a traineeship with the European External Action Service.