[Learning from the UK Energy Transition] How Has the UK's Energy and Climate Governance Evolved?

Three Government Reorganizations Since the 2008 Climate Change Act
Department of Energy and Climate Change Introduces Decarbonization, CfD, and Capacity Market
From BEIS to the Department for Energy Security and Net Zero After the Russia-Ukraine War
Support for Not Only Renewables but Also Nuclear and CCUS
Policy Consistency Maintained Through the Independent Climate Change Committee

"The new ministry overseeing energy and climate policy must be established as an independent body, separate from existing ministries. Only then can it be free from the influence of established industries and stakeholders."

As various discussions are underway in Korea regarding President Lee Jaemyung's pledge to create a new Ministry of Climate and Energy, the United Kingdom's energy and climate governance is emerging as a benchmark.

Matt Webb, Deputy Director of E3G, a UK climate and energy think tank, met with Korean journalists on June 27 (local time) during the "2025 Offshore Wind Journalist Training" organized by the Journalists Association of Korea and Next, and emphasized that a new climate and energy ministry must be structured independently from existing ministries in order to drive innovative policies.

Matt Webb, Deputy Director of E3G, a UK climate and energy think tank, is interviewing with the Korean press corps. Photo by Heejong Kang

He argued that simply transferring the energy portfolio from the Ministry of Trade, Industry and Energy to the Ministry of Environment, or vice versa with the climate portfolio, would not be desirable. Matt Webb has overseen energy transition for businesses and industries across a range of UK climate and energy ministries, from the Department of Energy and Climate Change (DECC), through the Department for Business, Energy and Industrial Strategy (BEIS), to the current Department for Energy Security and Net Zero (DESNZ). At E3G, he leads global campaigns to accelerate energy transition.

UK: Three Government Restructurings Since the Climate Change Act

Since the enactment of the Climate Change Act in 2008, the UK has restructured its energy and climate change ministries three times. In 2008, Prime Minister Gordon Brown established the Department of Energy and Climate Change, which consolidated climate change responsibilities from the Department for Environment and energy responsibilities from the Department for Business.

At the time, there were concerns in the UK that one area might become subordinate to the other, but these concerns were dispelled through debate. Matt Webb noted, "There were intense internal debates as energy mix and carbon reduction policies, which had previously been managed by separate ministries, were now decided within a single ministry," adding, "This process enabled the development of innovative policies." He emphasized that if new functions had simply been merged into an existing ministry, fair and transparent debate would have been difficult.

After its launch, the Department of Energy and Climate Change swiftly advanced carbon reduction and renewable energy expansion policies, achieving significant results. The framework for these policies remains in place to this day.

The Department introduced the Carbon Price Floor (CPF), which encouraged the closure of coal-fired power plants. As the CPF raised the price of carbon, coal plants that became less competitive began to close in succession. The UK government had initially set a target to close all coal plants by 2025, but the actual closure date was moved up by one year to September 30, 2024.

In 2017, the UK, together with Canada, launched the Powering Past Coal Alliance (PPCA), and has since led a global campaign for coal phase-out. During the training in London, Julia Skorupska, Secretary General of the PPCA, said, "I positively evaluate President Lee Jaemyung's pledge to close coal-fired power plants by 2040," and emphasized, "After setting a target date, it is important to develop concrete implementation plans."

Among Korean local governments, Chungcheongnam-do, Jeollanam-do, Gangwon-do, Gyeonggi-do, Jeju-do, Seoul Metropolitan Government, Incheon Metropolitan City, and Daegu Metropolitan City are members of the PPCA. Skorupska said, "We hope the Korean central government will also join."

Julia Skorupska, Secretary General of the Powering Past Coal Alliance (PPCA), is being interviewed by a Korean press delegation in London, UK. Photo by Heejong Kang

The Department of Energy and Climate Change also introduced the Contracts for Difference (CfD) scheme to aggressively expand renewables such as wind and solar power. Under the CfD, power generators and the government sign contracts at a fixed price, and the difference between this and the actual market (wholesale) price is settled. If the market price falls below the contract price, the government pays the difference; if the market price rises above the contract price, the generator returns the excess profit to the government.

Oli Wilson, Head of RE100 and Energy Transition at Climate Group, said, "The CfD scheme has significantly reduced the price of offshore wind in particular," adding, "It would be beneficial for Korea and other countries to benchmark this system."

Oli Wilson, Head of RE100 and Energy Transition at Climate Group, is being interviewed by a Korean press delegation in London, UK. Photo by Heejong Kang

As the UK phased out coal and rapidly increased renewables, concerns arose about the stability of electricity supply. The Department of Energy and Climate Change introduced the capacity market to address these issues and compensate for the intermittency of solar and wind power.

The capacity market is a system in which the government compensates power resources for being available to supply electricity when needed, even if they are not actually generating power at the time.

Gas power plants, energy storage systems, and demand response (DR) providers can enter into contracts with the government to maintain their readiness to supply electricity, and receive an annual payment regardless of actual generation. Through the capacity market, the UK positioned gas power plants as a bridge toward carbon neutrality.

In 2016, with the inauguration of Conservative Prime Minister Theresa May, the UK merged the Department of Energy and Climate Change with the Department for Business, Innovation and Skills (BIS) to form the Department for Business, Energy and Industrial Strategy (BEIS).

BEIS was tasked with managing industrial growth and energy policy simultaneously, aiming to achieve both economic development and climate goals. However, as BEIS grew larger, it also faced criticism for inefficiency.

'Energy Security' Gains Importance... DESNZ Also Supports Nuclear and CCUS

Following the surge in gas prices after the Russia-Ukraine war, the importance of energy security and achieving carbon neutrality was highlighted, leading to the separation of BEIS's functions. In 2023, Prime Minister Rishi Sunak established the Department for Energy Security and Net Zero (DESNZ), focusing exclusively on the energy sector. DESNZ continues to operate under Labour Prime Minister Keir Starmer as of 2024.

To achieve both energy supply stability and carbon neutrality, DESNZ is prioritizing the expansion of renewables, while also mobilizing a range of options including nuclear power, hydrogen, and carbon capture, utilization and storage (CCUS). The UK government aims to supply 95% of its electricity from low-carbon sources, including renewables and nuclear, by 2030.

To strongly promote its energy transition policy, the UK Labour government established the state-owned energy company Great British Energy (GB Energy) in May 2025. GB Energy plans to invest 8.3 billion pounds over the next five years in wind, solar, hydrogen, nuclear, and CCUS.

The UK is also maintaining investment in nuclear power as a baseload source to complement renewables. In June 2025, the government confirmed a 14.2 billion pound investment plan for the Sizewell C nuclear power plant. In addition, 2.5 billion pounds will be allocated to the small modular reactor (SMR) program, with Rolls-Royce selected as the preferred bidder for SMR development.

In the UK, energy transition is seen not only as a response to the climate crisis but also as a means to strengthen energy security, stabilize energy prices, and create quality jobs. Matt Webb commented, "According to E3G's analysis, as a result of net zero policies, even if another energy crisis like the Russia-Ukraine war occurs in 2030, costs could be reduced by one-third," adding, "This is what drives the UK's energy transition."

Independent Climate Change Committee Provides Advice and Oversight... Consistency Maintained Across Governments

The driving force behind the UK's successful energy transition has been the Climate Change Act of 2008, the world's first domestic law dedicated to climate change. When enacted, the law set a target to reduce greenhouse gas emissions by 80% from 1990 levels by 2050. This target was revised in 2019, based on advice from the Climate Change Committee (CCC), to a 100% reduction from 1990 levels by 2050.

Under the Climate Change Act, the UK establishes a 'carbon budget' every five years, setting a cap on emissions to achieve its reduction targets. The government sets the carbon budget based on advice from the Climate Change Committee, and Parliament enacts the Carbon Budget Order accordingly.

The Climate Change Committee plays a central role in the UK's carbon neutrality governance. Established by the 2008 Climate Change Act, it is an independent statutory advisory body at the national level. The Committee provides advice on long-term greenhouse gas reduction targets, evidence and recommendations for setting carbon budgets, and assessments of progress toward emissions reduction goals.

Committee members are guaranteed terms of two to five years. While they are appointed by the state, they do not represent any interest group or organization. If the government's opinions or decisions differ from the Committee's advice or assessments, the government must provide supporting evidence, and Parliament gives final approval based on this.

The Climate Change Committee is credited with ensuring that the UK's climate and energy policies have remained consistent regardless of changes in government. Oli Wilson of Climate Group remarked, "The reason the UK has been successful in its energy transition is that support for renewables has transcended party lines," adding, "While there have been minor differences between parties, there has been no disagreement that renewables must increase."