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· Government
ends future support for renewable power deployment in Budget
until an estimated 2025
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· No
additional clarity as to how projects will be supported following
the existing round of “Contracts-for-Difference” auctions in
2020
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· Carbon
price trajectory not set as expected
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· Lack
of clarity around how future heat projects will be
supported
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· New
support for electric vehicles welcomed but does not fully address
significant issues that this Budget poses to the larger renewable
energy and clean tech economy
The Chancellor’s Autumn Budget today has confirmed that no new
funds will be made available for the “Levy Control Framework,”
which funds new renewable electricity projects, until what is
likely to be 2025. Existing auctions confirmed until 2020 are
still to go ahead.
Clarity regarding the long-term trajectory for the Carbon Price
has also not been given as was expected it would be in this
Budget to support recent Clean Growth Plan announcements.
While the renewable energy industry welcomes the movement to a
subsidy-free future, the industry now urgently needs clarity
around how the Government intends to bring new projects forward,
including less developed technologies such as tidal and advanced
waste-to-energy. Many new solar PV projects, for example, will in
the future be able to go ahead without subsidy but investors
still require a route to market supported by Government, even if
it is set at such a level that there is no net payment from the
Government to generators.
In 2016 the National Audit Office estimated that 64GW (around two
thirds) of the UK’s existing electrical generation capacity was
set to be retired by 2035, largely nuclear and coal. This comes
at a time when electricity demand is expected to increase due to
the electrification of transport.
Additionally, no clarity has been offered around how the
Government intends to support the decarbonisation of heat post
2020/21, which the sector urgently needs and had been flagged as
one of the Government’s top priorities.
New support for electric vehicle charge infrastructure is
welcomed by the REA.
Commenting on the Budget, James Court, Head of Policy and
External Affairs at the Renewable Energy Association said:
“Whilst the announcements for electric vehicles are positive,
the UK government seem to be turning their back on renewables by
announcing no new support for projects post 2020 and a freeze on
carbon taxes. This could see a hiatus in much needed
infrastructure development. Considering this is coming only a
couple of months after the much vaunted Clean Growth Plan, it’s
hugely disappointing.
“The Chancellor talked about embracing the future in his
speech, yet hid away the details that he was blocking all
renewables to market. Onshore wind and solar are already cheaper
than new build gas, and we have seen huge cost reductions
happening in offshore wind, energy from waste and biomass. These
are the technologies of the future and the Government should be
backing them, not blocking their progress.
“The renewable power and heat sectors are urgently calling
for clarity around how the Government intends to bring forward
new capacity.”
