Renewable energy and energy efficiency

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United Kingdom

Various UK Acts have implemented policy measures which incentivise the generation of energy from low-carbon sources, in order to reduce GHG emissions. Key examples are:

  • The Climate Change Levy (an environmental tax on a company’s electricity and gas use)
  • Feed-in tariffs for small-scale low carbon electricity generation (e.g. wind turbines, solar panels and micro combined heat and power)
  • Renewable heat incentives (pay individuals who install an eligible renewable heating system such as solar, waves/tidal or biomass fuels)
  • The Green Deal (assists with investment in energy-saving improvements to buildings)
  • Contracts for Difference ( “auction” contracts to provide low-carbon power to incentivise developers to pay the high upfront costs of low-carbon electricity generation projects)
  • The electricity Capacity Market (ensures that electricity demands continue to be met)
  • Market-intervention powers enabling the modification of the conditions of electricity generation and supply licences

UK legislation has also imposed duties on various individuals and bodies in order to reduce GHG emissions. These include:

  • The use of biofuels in transport
  • Household waste reduction schemes
  • Emissions reduction targets for gas and electricity companies
  • Reporting on the efficiency and sustainability of the civil estate
  • Requiring electricity suppliers to source electricity from renewable sources
  • Smart meters
  • Schemes for reducing fuel poverty (including the Energy Company Obligation)
  • Increasing the availability of energy performance data
  • Requiring the cheapest tariff information to be included on energy bills


There is a Welsh scheme for providing household energy efficiency grants, whose conditions are set out in the Home Energy Efficiency Schemes (Wales) Regulations 2011.

The Wales Act 2017 amended the Government of Wales Act 2006 to prescribe that the (then) National Assembly for Wales could make legislation in relation to:

  • Heat and cooling networks (a system or network by which steam, hot water or chilled liquid is distributed from a central source for supplying heat or cooling to consumers or premises) (except their regulation)
  • Schemes providing incentives to generate or produce, or to facilitate the generation or production of, heat or cooling from sources of energy other than fossil fuel or nuclear fuel
  • The encouragement of energy efficiency (otherwise than by prohibition or regulation)
Published on
08 April 2021
Last updated
17 June 2021