As a member of the cabinet and a secretary of state, Mr Miliband – a close ally of Gordon Brown – will take on a portfolio trying to co-ordinate policy more effectively.
Climate change policy was previously overseen by the Department for the Environment, Food and Rural Affairs while energy policy was covered by the Department for Business, Enterprise and Regulatory Reform.
More than 100 civil servants will switch to the new department and discussions have been ongoing this week on its future shape and exactly which responsibilities will be passed over.
Andrew Warren, director of the Association for the Conservation of Energy and deputy chairman of the Energy Efficiency Partnership for Homes, said the establishment of the new department was an important gesture.
He said: “It is much more likely we will have clear direction on policy as we will have just one department covering energy policy.
“The previous situation has made the situation extraordinarily difficult for everyone as conflicting messages have come out. After 16 years both parts of energy policy – the supply side and demand side – are finally being brought together again.
“Until now the UK has been the only developed country to divide [within the decision making process] those who are promoting more consumption and those who want to help use energy more efficiently.”
The Renewable Energy Association (REA) is expecting to meet with Mr Miliband in the coming weeks. It says including renewable heat – including biomass and heat pumps – in the renewable energy tariff being considered for the current Energy Bill must be a priority.
Philip Wolfe, REA director general, said: “It has historically been such a neglected area of policy. It has the potential to reduce carbon emissions by a third, but up to now there has been absolutely nothing in terms of energy policy on this.
“Having a new department just focused on the issue of energy and particularly sustainable energy has to increase the chances that the policy portfolio will be more comprehensive and go beyond what was considered by his predecessors.”
Graham Meeks, from the Combined Heat and Power Association, said: “This is a real step forward. It should be a major boost for the clean energy sector.”
Dave Sowden, from the Micropower Council, also welcomed the move, but issued a warning.
He said: “I think bringing together the energy and climate change brief into one and linking demand side and supply side has to be welcomed.
“One important component which remains unclear is building policy. Building regulations and in particular Part L are important drivers for our sector and it remains to be seen whether policy making will improve if that aspect remains with the Department for Communities and Local Government while the rest of energy policy is under the new department.”