Industry body urges Levy Control Framework review

Trade body Energy UK has called on the UK Government to launch an “urgent” review of its Levy Control Framework (LCF).

The LCF is the mechanism used to cap subsidies for low-carbon generation to limit their impact on consumers’ bills.

A new report by Energy UK said clarity is needed on subsidies post-2020 to attract investors.

The trade body wants to see a redesigned LCF launched by the end of the year, along with spending levels until 2025.

‘Long-term policies’

Lawrence Slade, Chief Executive of Energy UK, said: “Working with government to develop a holistic approach to policy and long-term policies that underpin the economic confidence of investors, the UK energy industry can deliver affordable reliable and clean energy now and into the future.

“But the energy sector cannot meet the country’s green goals alone and we are looking at ways to work with other industry sectors.”

Simon Virley, Corporate Finance Partner at accountancy firm KPMG, which compiled the paper, added: “This report paints a picture of a Great British power sector by 2030 that is more decentralised, more interconnected with Europe, with much greater energy efficiency and demand side response.  

“This 'smarter' energy system will give consumers more control and help keep bills down.”

NAO examines LCF

News of Energy UK’s report came as the National Audit Office (NAO) announced that it was investigating the effectiveness of the LCF and its impact on wholesale energy prices.

The investigation is expected to be completed by the summer.

The NAO’s probe came in response to a request from the House of Commons’ Energy & Climate Change Committee.

> Download the report