Government ends future support for renewable power deployment in Budget
until an estimated 2025
No additional clarity as to how projects will be supported following the
existing round of “Contracts-for-Difference” auctions in 2020
Carbon price trajectory not set as expected
Lack of clarity around how future heat projects will be supported
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.”
ENDS
For more information or to request an interview, please contact:
Daniel Brown
Media and External Affairs Officer
+44 (0)20 7981 0857
dbrown@r-e-a.net
The Autumn Budget can be found here:
https://www.gov.uk/government/topical-events/autumn-budget-2017
The NAO’s report can be found here:
https://www.nao.org.uk/wp-content/uploads/2016/07/Nuclear-power-in-the-UK.pdf
About the Renewable Energy Association (REA)
The Renewable Energy Association represents renewable energy producers and
promotes the use of all forms of renewable energy in the UK across power,
heat, transport and recycling. It is the largest renewable energy and clean
technology (including energy storage and electric vehicles) trade
association in the UK, with over 600 members, ranging from major
multinationals to sole traders.
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