For the last decade of the twentieth century and some years thereafter, UK Energy Policy was very 'hands-off'. Following privatisation of most of the energy industry, the government Department of Energy was disbanded (and moved into DTI).

Policy seemed to be "the market will decide", while the government focussed on the activities of the regulator Ofgem, to ensure that consumers were not disadvantaged. This led to a highly liberalised energy market and low energy prices. Investment in energy capacity and infrastructure was modest.

This is changing through a combination of developments in Europe and concerns about energy security and climate change.

Energy policy reviews

The government instigated an Energy White Paper in 2003 - "the first for a generation". This, for the first time, identified environmental issues as a major policy driver. The government committed to 60% reductions in carbon dioxide emissions by 2050. This more visionary approach for UK energy was widely welcomed.

However the White Paper led to very little tangible legislative or regulatory action (the Renewables Obligation had already been introduced in the previous year).

The government decided in 2006 that another review was needed and this led to the 2006 Energy Review and the 2007 Energy White Paper. In another piece of unfortunate timing this was published just a few weeks after the new European energy targets wer adopted, and was unable to take them into account. Accordingly it has been largely superceded by the Renewable Energy Strategy. The 2008 Energy Act was initially based on the 2007 White Paper, but later had amendments added, based on the Renewable Energy Strategy and on the REA campaign for renewable energy tariffs.

Energy sectors

UK energy policy has tended to focus almost exclusively on electricity and on energy production (supply side) rather than energy users (demand side).

Heat and transport energy, both in terms of traditional sources and renewables, had been largely ignored until the Renewable Energy Strategy and the Renewable Transport Fuels Obligation.