In a report launched on Tuesday morning, the CCC calls on the government to give the power sector confidence over the next ten years to invest, by extending the LCF and providing rolling annual updates.
It argues that doing this will not only provide the sector with the confidence to continue to invest, but help to reduce costs at the same time and lower carbon emissions.
In order to help cut carbon emissions further, the CCC calls on government to contract at least two more carbon capture and storage projects this parliament and to set out an approach to commercialise the technology.
The report also urged government to support offshore wind into the 2020s until subsidies can be removed and to set out the intention to contract up to 2GW per year.
CCC chairman Lord Deben said: “Virtually all policies or funding in these areas are due to expire during this parliament.
“Without significant new policies progress will fall behind what is required to meet legal obligations through the 2020s.”
Responding to the call to extend the LCF and for offshore wind to remain subsidised into the 2020s Renewable UK director of policy Gordon Edge said: “If ministers are serious about working with us to make offshore wind one of the most cost effective sources of energy in the next decade, they need to spell out how much they want to see built and set out a clear timetable for this.
“Visibility is the key word here – especially on budgets and the availability of Contracts for Difference.”
In order to help reduce energy demand and carbon emissions, the CCC calls on the government to set out the future of the Energy Company Obligation beyond 2017, ensuring it delivers energy efficiency while also meeting fuel poverty targets.
Lord Deben added: “This government has a unique opportunity to shape climate policy through the 2020s.
“It must act now to set out how it plans to keep the UK on track. Acting early will help to reduce costs to households, business and the Exchequer.
“It will improve people’s health and wellbeing and create opportunities for business in manufacturing and in the service sector.”