Signalling the need to take the necessary decisions for the long term, trade and industry secretary Alistair Darling outlined proposals designed to reduce the demand for energy, to secure a mix of clean, low carbon energy sources and to streamline the planning process for energy projects.
'We face two big challenges, climate change and the need to provide secure cleaner energy at affordable prices.
'Here in the UK there are specific challenges. As our North Sea oil and gas production declines, our dependence on imports from the global energy market will increase. Our forecasts suggest that, over the next twenty years, up to a third of our existing generating capacity will reach the end of its life.
'This is a critical moment to make informed choices to safeguard our quality of life for the coming decades. Today's proposals will set out a framework within which the energy market will operate for the coming 30 to 40 years.
'First, we must save energy. The new measures we're bringing forward will help us save energy in our homes, in businesses and in our public buildings, saving carbon and saving money. There'll be more help for homeowners to understand and reduce their energy bills, the phasing out of inefficient electrical goods and a consultation on new incentives to reduce emissions from large organisations like supermarkets and hotel chains.
'In parallel we're proposing measures to ensure that the energy we do use is secure and emits as little carbon as possible. It is clear that we need a mix of energy and that the challenges are so great that we cannot afford to rule out any low-carbon energy source that could help.
'The proportion of electricity generated from renewables needs to increase substantially so we are strengthening and reforming the Renewables Obligation to push this towards 20% - a five-fold increase on today's level. We're proposing major reforms to promote this and other clean energy sources, including steps to remove barriers to carbon capture to ensure cleaner coal and gas. And, although the North Sea oil fields are mature, we will press ahead with measures to exploit remaining reserves, including west of Shetland.
'Nuclear power already accounts for almost a fifth of our electricity but this is likely to drop to just 6% by 2020. Our analysis suggests that, alongside other low carbon generating options, a new generation of nuclear power stations could make a contribution to reducing carbon emissions and reducing our reliance on imported energy.
'At the heart of our policy will be the incentives we give business and individuals to reduce carbon emissions. The EU Emissions Trading Scheme generates a value for carbon which helps to drive improvements in energy efficiency, investment in renewable electricity and other technologies that reduce carbon emissions. We need to strengthen the scheme so it can do this more effectively.
'Critically, the planning system needs to be streamlined and it needs to deliver. We'll be acting to ensure that energy companies, whether seeking to build gas storage facilities, wind farms or any other kind of large energy installation, are not faced with costly uncertainties and delay. Local concerns about specific sites must be taken into consideration but the right balance has to be struck with the national need for our vital energy infrastructure.'
Energy minister Malcolm Wicks, who headed up the review, said:
'It's not possible in 2006 to make all the policy decisions needed up to 2050. Circumstances will change, technology in particular will advance, but today's proposals set us more firmly on track to achieving our energy policy objectives.
'Together our proposals would result by 2020 in a reduction in annual carbon emissions of 19-25 million tonnes of carbon, the equivalent of the annual emissions of Austria or Greece. Together with the steps we have already announced, these ambitious proposals are a significant step in the right direction, getting us on course to achieve real progress in emissions reductions by 2020 and on the right path to achieving our goal of cutting the UK's CO2 emissions by some 60% by about 2050. The measures will also reduce our over-dependence on imported gas and will help bring forward substantial new investment in generating the electricity on which we all depend.'
Major proposals, many for further consultation over the coming months, include:
* Driving the least efficient domestic appliances and consumer electronics out of the market.
* Further work on a radical plan to transform energy supply companies into champions of emissions reduction.
* Strengthening the EU Emissions Trading Scheme post 2012.
* Measures to incentivise carbon savings for large organisations like supermarkets and hotel chains and large local authorities.
* Using Government's purchasing power to drive efficiency standards.
* Changes to boost renewables investment - reshaping the Renewables Obligation, banding the support to give more benefit to emerging technologies such as offshore wind, wave and tidal projects, and a new Statement of Need.
* Aggressive implementation of the Microgeneration Strategy to remove barriers to household renewables.
* A series of measures and review of ways to bring on more localised 'distributed' generation.
* Fundamental change to the planning system for all types of energy projects, including timelines for inquiries and a high-powered inspector for complex and controversial projects.
* Measures to facilitate new nuclear power stations - streamlining the licensing process, clarifying the strategy on decommissioning and waste. A consultation is launched today on a policy framework, including a Statement of Need. It will lead to an Energy White Paper around the turn of the year.
* Removing regulatory barriers to carbon capture and storage, intensifying international cooperation with partners such as Norway and further work on the costs of demonstration.
* Maximising exploitation of North Sea reserves, refocusing the Stewardship initiative and a Taskforce with industry on infrastructure to the west of Shetland.
* A new Coal Forum bringing together coal-fired generators, coal producers, power plant suppliers, trade unions and others to seek solutions to securing the long-term future of coal-fired generation and UK coal production.
* Pressing the European Commission to bring road transport into the EU Emissions Trading Scheme. Also a Transport Innovation Strategy to bring on alternative fuels and possible extension of the Renewable Transport Fuel Obligation.
* A review of the effectiveness of current gas security of supply arrangements.
Environment secretary David Miliband said:
'Climate change is the biggest environmental threat that we face. And so all parts of society need to act if we are to cut the amount of greenhouse gases released into the atmosphere.
'As the energy review concludes, the sensible first step is to be smarter about the way we use energy. We can save money and the environment if we tackle the amount of energy wasted in our homes and businesses.
'In facing up to the climate challenge, the UK needs a balanced energy policy with a good mix of low carbon energy sources. Today's proposals are a major boost to renewable and localised energy and will put us on course towards the necessary long-term reductions in carbon dioxide which are essential if we're to avoid dangerous climate change.
'Moving to a low carbon economy need not be at the expense of our economic of social goals. Ignoring climate change would have much greater economic and social costs.'
2. Published alongside the Energy Review conclusions today are a summary of responses to the consultation and a number of analytical reports commissioned from consultants.
3. Energy minister Malcolm Wicks was asked by the Prime Minister and the then Trade & Industry Secretary Alan Johnson on 29 November 2005 to lead a review of Energy Policy and to bring forward policy proposals by the summer. A consultation ran from 23 January to 14 April during which more than 5,300 responses were received and a series of seminars across the UK sought input from industry, NGOs and other stakeholders. The Review has been conducted by a cross-departmental team based in the DTI, with officials drawn from key relevant departments and the Prime Minister's Strategy Unit. The devolved administrations and territorial departments were involved throughout the course of the Review which has also drawn on expert support and analysis both within and outside Government.
5. Also published today is the Secretary of State's Second Report to Parliament on Security of Supply of Gas and Electricity Supply in Great Britain. This can be found at www.dti.gov.uk/energy/energy-reliability/security-supply/index.html