Budget 2020: the industry responds

Lord Deben, chair, Climate Change Committee: “This a realistic start. Obviously we will have to wait for the Infrastructure Strategy to see it all in the round. I am particularly pleased to see the Chancellor’s support for carbon capture and storage – and for his determination to use the tax system to encourage the right environmental choices.”

Dr Nina Skorupska CBE, chief executive, REA: “This budget provides some welcome fiscal support for the renewable energy and clean technology; there are clear steps in the right direction especially around the Green Gas Obligation consultation, extension of the domestic RHI, Carbon Capture and Storage, decarbonising transport and R&D funding. This budget, however, does not make the strides needed to fully unleash the potential of the sector and pave the way to net zero.

“With the declared climate emergency, the government needs to take decisive action to produce a whole-government Net Zero Strategy that includes a detailed, funded and measurable roadmap that delivers the wholesale systems-change required to decarbonise the economy, and then ensure that we have an effective taxation system that protects natural capital, and incentivises renewable energy and clean technology beyond fossil fuels.”

 

Duncan Law, Policy and Advocacy Manager, Community Energy England: “This Budget could have been far more ambitious in its scope to create a better, cleaner and more equitable energy system creating more resilience in the UK energy network….Among giveaways and the occasional claw-back, for instance of Entrepreneurs Relief, there was very little for the enterprising and dedicated people who have been pioneering the future of energy in their local communities. The Committee on Climate Change says that the transition to net zero will be impossible without the consent and participation of people and communities. Community energy is key to this engagement….

“We had hoped for the reinstatement of Social Investment Tax Relief for community energy, business rate concessions in recognition of the important social benefits, a pledge to reverse the hike in VAT from 5% to 20% for energy saving measures, with an ambition to reduce it to zero and announcements of the details of funding for energy efficiency upgrades to housing. 

“The main investment in ‘increasing the UK’s use of clean energy’ is ‘a Carbon Capture and Storage (CCS) Infrastructure Fund’ of £800m to enable the continued use of fossil fuels. …”

 

Nick Molho, executive director, Aldersgate Group: “Today’s budget announcement devoted more time to the environment and climate change than many of its predecessors. It contained some welcome announcements on nature, urban transport, the move towards electric vehicles and a much-needed scaling up of innovation support for industrial decarbonisation and carbon capture storage…

“Many gaps still remain to put the UK on track for net zero emissions, such as improving the energy efficiency of the building stock, developing an integrated low carbon transport strategy in line with the lessons from the recent Heathrow ruling, and creating a national low carbon skills strategy to support the workforce. To close these gaps, ensure policy coherence and put the UK credibly on track for its target, the government should build on today’s announcements and publish a net zero delivery plan well ahead of COP26.”

 

Chris Hewett, chief executive, STA: “Unfortunately this Budget is thin on measures to tackle climate change and support the transition to a low-carbon economy. Renewables are vital to reaching net zero, and without good policies in place to support the uptake of solar we will fall well short of the 40GW needed by 2030 to keep on track. Time is running out to act.”

“The freeze on the carbon price support rate is particularly disappointing, as is the lack of any meaningful policy on energy efficiency and green improvements for existing homes, such as solar and battery storage.”

“We do welcome the decision to hold a review of business rates, which are the main barrier to the deployment of large rooftop PV. Additionally, we are pleased to see an extension to the Renewable Heat Incentive, and the introduction of a Low Carbon Heat Support Scheme, which categorically must apply to solar heat technologies.”

 

Isaac Occhipinti, head of external affairs, EUA: “EUA are, of course, pleased that Chancellor Sunak’s has included green gas, heat pumps and heat networks, in addition to a Low Carbon Heat Support Scheme- a successor to the Renewable Heat Incentive, RHI, in his first budget, but in all honesty, it’s not enough.”

“An affordable, secure and sustainable energy system is of paramount importance to the UK. If we are to achieve it, we must put in what we seek to get out.”

“EUA have long championed the need for carbon capture and storage, as a means of allowing the UK to use flexible energy sources such as hydrogen, to meet seasonal variations, dictated by the UK climate whilst supporting carbon reduction.

“Government have recognised that ‘power generated by some renewable sources is dependent on the weather, so the UK also needs reliable low carbon power from technologies such as nuclear, gas with carbon capture and storage (CCS), and hydrogen.’

“EUA believe that carbon capture is one of the most significant potential contributors to reducing carbon emissions whilst continuing to utilise the UK’s most valuable asset- the gas grid.”

 

James Watson, partner and sector leader for energy and utilities, Osborne Clarke: ”The devil will be in the detail, but the 2020 budget investment needed to reach the Government’s 2050 carbon reduction targets which has not been delivered. For example, the £800M in carbon capture and storage will need to be increased several times over to reach those targets. As well as more investment in EV charging infrastructure and renewable energy. The speech did not even mention renewables.”

 

Luke Warren, chief executive, CCSA: “The announcement of at least £800M to support the development of two CCS clusters in the 2020s is a really welcome and a very significant step forward. The UK government has clearly recognised that CCS is an essential tool if we are to achieve the net zero target and they have now taken action to make CCS a reality.

“We look forward to working with the government in the run up to the Spending Review on the detail of how these funds can be used to ensure that CCS is deployed in multiple industrial regions in the 2020s, helping to support their transition to a net zero economy and creating the low carbon sectors of the future.

“With the UK hosting COP26 this year, we have today sent a strong signal to industry and the world, that the UK is committed to achieving its net zero target and aspires to become a global leader in the development of CCS as part of the global response to climate change”.

 

Katherine Jackson, technical director of energy, WSP:  “It took a year for net zero to become a mainstream issue and one of the more important items in the Government’s in-tray. … we hoped this Budget would unveil this government’s plans for delivering Net Zero. We will have to wait to know how we address energy efficiency, decarbonise transport and restore nature in this Year of Climate Action, but welcome that Whitehall is putting more energy into the matter.

“The dozens of local authorities we’re supporting to respond to climate emergencies, the industrial clusters and the communities we serve will undoubtedly very much welcome the further investment in flood defences and CCUS including the £800 million to establish new low carbon clusters by 2030.

“However, as we are off track to meet Net Zero, until the delivery plan is published industry cannot be complacent.

 

Michael Burns, energy partner, Ashurst: “While it’s positive news that the Government is making further funding available for CCS, this needs to supported by a clear policy framework, which hopefully will be delivered in the forthcoming Energy White Paper. We must assume that some lessons have been learned from the various pilot projects rolled-out in the past, that did not go very far.”

 

Antony Skinner, energy partner, Ashurst : “It’s very encouraging that a new support scheme is being introduced for biomethane but it will be interesting to see what the structure of the scheme is and how it interacts with existing support schemes – in particular, the RHI and the RTFO.”

 

Julie Furber, VP, Cummins Electrified Power: “The Spring Budget was a mixed bag in regards to UK’s transition to cleaner mobility. We welcome the much needed investment in electric transport solutions and rapid charging hubs which could result in a diverse variety of power options becoming more competitive on cost.

“However, too many assumptions are being made about electric power being the ‘holy grail’ for commercial mobility for the foreseeable future. In order to fully decarbonise transport, several alternative power options should be available to commercial businesses. Whether its traditional fuel sources, natural gas, fully electric, hydrogen or other alternatives, this variety is essential for a long transition period, to ensure industry players get the best return on productivity, efficiency, productivity and sustainability.”

 

Sue Robinson, director, National Franchised Dealers Association: “It is extremely encouraging to see that more than £500 million will be invested to support the rollout of new rapid charging hubs. Access to charging infrastructure is one of the key barriers preventing consumers from buying an electric car and, as a result, we welcome further investments which will continue to encourage motorists to purchase low and zero emission vehicles”.

 

David Smith, chief executive, Energy Networks Association: “The Chancellor clearly recognises the sheer scale of investment needed to deliver Net Zero by 2050. This Budget will help the UK transition to a much greener future, but it needs to be backed up by bold decisions in the forthcoming government Energy White Paper and the National Infrastructure Strategy. To deliver a Net Zero future, the government needs to support both investment and innovation across the whole energy system. Today’s news is good news, but now is the time to build on that.”

 

Darren Walsh, energy partner, DWF: “There are a number of subtle positives announced by the Chancellor in today’s Budget in connection with energy and the low carbon economy. It is pleasing to see still further expansion of the Energy Innovation Programme, as this covers a broad cross section of low carbon initiatives, including renewables, smart energy system technologies, nuclear, built environment, etc.  There is clear support for a carbon capture and storage power station by 2030 but there remains a lack of clear direction for new nuclear build which, as part of the overall energy mix, is essential in meeting the country’s decarbonisation targets by 2050 (or earlier).

“In addition, support for further decarbonisation of the transport system is welcomed.”

 

Ian McCluskey, head of technical services & policy, IGEM: “IGEM welcomes the announcement in today’s government budget of a doubling of investment in energy innovation, to support the UK’s journey towards net zero carbon emissions. We also welcome the government’s acknowledgement that the UK needs reliable low carbon power from technologies such as gas, with CCS and hydrogen.

“Natural gas continues to have an important role in providing power and heat across the UK and, as we transition to a decarbonised energy sector, the scaling up of biomethane, hydrogen and CCS will underpin a successful transition. As such, it is promising to see £800 million being committed to establishing two carbon capture clusters, one by the mid-2020s and one by 2030. We would urge that immediate action is taken to get these projects off the ground.

“We note that the Green Gas Levy is a proposal that will go through consultation. We eagerly await its publication and details of how it will be funded, in order to formulate a response on behalf of our members.”

 

Further reading

Budget 2020: chancellor claims government ‘is raising its ambition to decarbonise the economy’

 

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