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DECC Demolished: Energy Under New Management

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The newly formed Tory government under Teresa May has acted quickly and re-organised the Department for Business, which will be led by Greg Clark. To be renamed the Department for Business, Energy and Industrial Strategy, (BEIS) it will also take on energy policy.

As a result, the Department of Energy and Climate Change has been disbanded eight years after it was set up under Gordon Brown who created the Department dedicated to energy management. At the time it was seen as a clear signal that the UK would be prioritising climate change. The abolishing of DECC will be seen by many as the biggest single step back in decades.

Mr Clark, (who is considered pro renewables) the new Secretary of State for Business, Energy and Industrial Strategy, said: "I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading government's relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change."

So why the heavy heart?

The press has revealed Theresa May's voting record on climate and energy which shows she has been absent for many votes for energy and climate, which many suggest is proof that climate change may not be where her priorities lie. The move on DECC can only be seen as supporting this notion. Secondly the incorporation of the department under business is also a clear message that money matters and that energy will be managed as a business.

Another red flag is the choice of Andrea Leadsom as environment minister. Aside from being Ms May's political rival, suddenly dropping out of the Tory leadership race after a disastrous campaign, Ms Leadsom is also known for asking the killer question"¦ is climate change real on her first day as an energy minister.

The good news is she recently told a parliamentary group that she is now 'completely persuaded' on climate change!

So what next?

These restructurings happen every so often. Prior to DECC we had BERR and prior to BERR we had the DTI.  Nothing much changed.  Essentially what matters is that the civil servants who have the expertise and experience move into the new department.

The reality is the strategic requirements of cutting emissions and of energy security remain the same and the budgets in the LCF have been set. DECC have set out their policy objectives in relation to the various schemes (CfDs, FiTs and RHI). Obviously we have not yet had details of the CfD auction scheduled for this autumn so there is a possibility that this work will be hampered by the re-organisation.

Of more concern is the fact that, at a time when the government was trying to cut the deficit, and civil service costs, they are creating a Brexit department and apparently intending to employ a shedload of new civil servants dedicated to Brexit and new trade deals. You therefore have to wonder whether areas of government which are now deemed of lesser priority than Brexit (such as energy and climate change) will bear a greater burden of cuts.

Time will tell as they say.

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