Renewable Energy Association response to the budget: Oil & gas get more help, future low-carbon technologies starved of support

• ·         Chancellor of the Exchequer sets out the Spring Budget today
• ·         A policy structure for new renewable electricity deployment is needed beyond 2020/21 in order for major projects to be planned
• ·         Decisions on the future of the Levy Control Framework pushed back to “later in the year”

The Chancellor’s Spring Budget, released this afternoon, will keep the renewable and smart technology industries in a state of limbo. Key decisions regarding the future of the Levy Control Framework (LCF) and the Carbon Price Floor have been delayed, despite support being extended to the North Sea oil and gas sector around decommissioning

At present there is no clarification around the future of the LCF, a pot of funding and policies that have in the past supported low-carbon innovation and deployment, beyond 2020/201. This budget also contained no new information about the Government’s intentions regarding the future of the Carbon Price Floor.

Both these policies underpin low-carbon power deployment. The continued lack of clarity around their future is making it difficult for developers to plan for new low-carbon energy infrastructure into the 2020’s as the country decommissions its ageing coal and nuclear fleet.

Furthermore, the industry is frustrated at a disproportionate rise in business rates for rooftop solar developers, which will punitively harm those businesses actively trying to reduce bills and decarbonise their power supply.

James Court, Head of Policy and External Affairs at the Renewable Energy Association said:

“This budget was at best a placeholder for the renewables industry, resulting in more questions than answers. 

“This budget has created new uncertainty around the levy control framework beyond 2021. The industry was expecting an announcement regarding the future budget levels and structure but this has been delayed and instead we face a new regime and no clarity on the proposed new ‘set of controls.’  

“The decision over the Carbon Price Floor has yet again been kicked down the road and no details have been given for renewables and companies adversely affected by huge business rates increases.

“As the Treasury notes, ‘The UK already has one of the most competitive tax regimes for oil and gas in the world’, yet whilst end of life oil and gas get yet more help, future low-carbon technologies are starved of support.”