New Inquiry Launched on Energy Subsidies in the UK

24 April 2013

The Environmental Audit Committee is today launching a new inquiry into Energy Subsidies in the UK

This will investigate what should constitute ‘subsidy’, the extent of energy subsidies in the UK for nuclear energy, fossil fuel energy and renewables, and what the Government should be doing to identify and eliminate those subsidies which are — using the UN’s terminology — "harmful".

The inquiry begins today by taking evidence from Oxford Energy Associates which has produced for the Committee a detailed analysis of the extent of energy subsidies in the UK, and the Committee is calling for written evidence from academics, think-tanks and the public on these issues.

Environmental Audit Committee Chair, Joan Walley MP, said

"Energy subsidies are sometimes needed to develop promising new technologies and correct market failures, but the Government is not always open about what constitutes a subsidy. Our inquiry will seek to get to the bottom of the sums involved in the UK and what does or does not constitute a subsidy."

The Committee will be examining in its inquiry

(i) whether the Government has identified the extent of energy subsidies, and measured them;
(ii) how well any identification of subsidies by the Government matches up to best practice methodologies in how energy subsidies are defined and scoped;
(iii) the scale of subsidies in the UK, including comparison with other countries;
(iv) whether the Government has any plans or targets to reduce or eliminate ‘harmful’ subsidies;
(v) progress in reducing such harmful subsidies, and how current energy policies and DECC’s ‘Energy Pathways’ for the mix of energy sources will influence the magnitude of any subsidies.

The Committee is inviting written evidence on these issues, and the Oxford Energy Associates work for the Committee, by 14 June. Guidance on how to submit evidence will be available on the Committee’s website.

Further information

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