Leaders of Britain’s current & future energy industry have reacted coolly and in widespread disappointment to yesterday’s Spring Budget.
Extending Contracts for Difference funds underpinning upcoming power auctions for the first time to £1 billion was Jeremy Hunt’s highlight in green power, offered yesterday in the Conservatives’ final budget before this year’s probable election. The chancellor earmarked £800 million of the new money for offshore wind.
Representing wind generators, Renewables UK welcomed the increased incentive, but said Hunt had still missed his chance to maximise offshore capacity.
As incentivised by the chancellor, the group believes this summer’s Allocation Round 6 will confirm at best 5GW of new offshore turbines. But they pointed out that’s only half the capacity already identified by offshore developers as eligible to bid.
The government needed to do more, the wind representatives implied, to recover from last year’s disastrous bidding round, shunned completely by developers due to an technical price level botched within Whitehall.
Renewables UK spokesperson Dan McGrail welcomed the new cash, but stated: “The Treasury has missed the opportunity to maximise new offshore wind”.
Hunt’s caution, McGrail specified, “means a delay in attracting billions of pounds in private investment which we could have secured in this year’s auction to build and operate these projects, and opportunities to grow our supply chain.”
Britain has 14.7GW offshore wind fully operational now, supplying 14% of the nation’s electricity.
Representing suppliers across a wider range of low carbon technologies, the Association for Renewable Energy and Clean Technology (REA) said it was “disheartened” by Hunt’s lack of sector wide measures.
Tackling climate change and boosting the UK’s economy were not ‘either-or’ decisions, said REA policy director Frank Gordon.
“This is a political budget above all”, Gordon declared, that does not reflect the urgency of Net Zero. It is disappointing overall”.
The REA spokesperson said the Chancellor had not met his promise made last year for a UK response to President Biden’s $800 Billion investment in US green supply chains and manufacturing enacted in the Inflation Reduction Act.
Gordon pointed out that the UK’s net zero economy grew 9% last year, in contrast to the stagnation in wider GDP, which ran at just 0.1%.
“And yet, sensible measures to support our UK success story have not been implemented”, the body observed.
“The Spring Statement arguably confirms the diminishing of Net Zero legislation as a recurring theme of this administration”, said the REA.
Extending for a further year the Energy Profits Levy, which caps profits from North Sea oil and gas companies, Hunt also tabled a £270 million joint investment in zero-carbon aircraft technology to develop a more sustainable aviation sector, and for zero emissions automotive technology.
The Green Industries Growth Accelerator fund will get a small increase of £120 million, to support the expansion of clean energy supply chains across the UK.
For solar power developers & suppliers, SolarEnergyUK’s head of policy Gemma Grimes branded Hunt’s package as “virtually nude of anything to bolster one of the UK’s fastest growing sectors: solar power”.
Britain’s solar industry very much hoped, Grimes added, that the Green Jobs Plan, expected later this month, will provide a firmer vision of how to grow the industry, by addressing the lack of critical skills in the workforce. Shortages were holding back deployment of the UK’s cheapest source of electricity, she said.
