Deep concern in renewable energy industry about proposals in Autumn Budget

The Chancellor’s Autumn Budget on Wednesday 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.”