May, who won a truncated leadership contest in July, prompted by the resignation of David Cameron following the UK's referendum vote to leave the European Union, has subsumed energy responsibilities within a beefed-up business department.
"This is a major setback for the UK's climate-change efforts," said Ed Davey, Decc's chief minister between 2012 and 2015 under the Conservative-Liberal Democrat coalition government. "By downgrading the Whitehall status of climate change, Theresa May has hit low-carbon investor confidence yet again."
The department's first chief (2008-2010), Ed Milliband, tweeted: "Plain stupid. Climate not even mentioned in new title. Matters because departments shape priorities, shape outcomes."
Chris Huhne, who headed the department from 2010 to 2012, said: "It is a serious downgrading of British capability in the area, and it sadly fits with a shift to the right in government, where Euroscepticism often goes hand in hand with climate scepticism."
Both of Decc's most recent ministers have been handed new roles in May's government. Department chief Amber Rudd has been promoted to home secretary, and junior minister Andrea Leadsom has moved to the environment department with particular responsibility for agriculture and fishing.
Greg Clark has been appointed head of the new business, energy and industrial strategy department (BEIS). Clark is regarded as a moderate, who claims on his website that his political achievements include "landmark policy papers" on low-carbon energy in the UK. He served as a shadow Decc minster between 2008-2010 when his Conservative Party was in opposition.
Following his appointment, Clark said: "I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading government's relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change."
No planned changes
There is no indication so far of any change in the UK's energy policy arising from the restructure. The focus will remain on eliminating coal from the energy mix, pressing ahead with the long-delayed Hinckley Point C nuclear plant, and developing a domestic shale-gas industry.
There are no plans to ease the consenting restrictions or reverse the cuts in support that have brought onshore wind development to a standstill.
The future of offshore wind in the UK will become clearer when Clark announces the next round of contracts for difference (CfD) auctions, the first of which is expected to take place by the end of 2016.
In November 2015, Rudd said the UK would hold three more CfD auctions by 2020 to support less-established renewable technologies including offshore wind.
The UK wind industry is facing a future outside the EU, following the vote in June to leave. The fall in the value of UK currency against the euro and US dollar will now make imported wind turbine components more expensive to procure.