Deep concern in UK renewable energy over ‘do-nothing’ Budget as White Van Man dodges new car diesel tax rise

Budget outlook: not so sunny for solar power
Budget outlook: not so sunny for solar power

The Renewable Energy Association last night expressed ‘deep concern’ about Chancellor Hammond’s Budget plans – or lack of them – for the green power sector, key points of which are:

  • 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

But there was muted support for a new £400 million fund to pay for the installation of re-charging points for battery powered vehicles (BPVs)

An REA spokesman said: “The Budget has confirmed that no new funds will be made available for the Levy Control Framework which funds new renewable electricity projects, until 2025.

“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 we welcome the move 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.

“And while 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.

“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.”

The chancellor also announced a new £400 million fund to pay for installation of new battery re-charging points for battery-powered vehicles (BPVs).

Hammond said: “Our future vehicles may well be driver-less but they’ll be electric first’. Then he joked:

“I know Jeremy Clarkson <a confirmed support of traditional petrol and diesel engines who presents a TV consumer motoring programme> doesn’t like them – but there are plenty of other good reasons to support BPVs!”

This ‘BPV baby-steps’ move was welcomed by independent energy consultancy, Baringa, where partner Oliver Rix said:

“The additional £400 million for electric BPV charge points does lend credibility to the Government’s commitment to increasing the number of electric vehicles on our roads.

“Confirmation that there will be no benefit in kind tax charge on electricity that employers provide to charge company BPVs is also welcome.”

Hammond also announced that car tax (vehicle excise duty) on new diesel powered cars (only) will be hiked up in April 2018 – thereby expressly excluding ‘White Van Man’ from higher diesel-engine taxes – presumably because this is considered to be a ‘too difficult’ message to sell to White Man Van Voters.

Rix added: ”The Government has already pledged to get 9% of drivers behind  BPV wheel by 2020, with a number of companies announcing they will stop producing diesel and petrol vehicles in the same year.

“But where existing measures have sought to reduce the cost of electric vehicles and improve the supporting infrastructure, today’s announcement of a tax on diesel cars goes one step further by actively disincentivising people from buying cars that are not electric.

The REA spokesman added: “Whilst the announcements for BPVs are positive, the government seem to be turning their back on renewables by announcing no new support for projects post- 2020 and a freeze on carbon taxes.”

23 Nov 2017

 

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed