Budget 2022: the industry responds

Frank Elsworth, head of UK onshore development, Vattenfall:
“The Russian invasion of Ukraine has put pressure on energy markets across the world and we recognise that we have a role to play to help deal with the economic problems the country’s facing. While an additional levy on low carbon generation is part of an overall package of measures announced by the Chancellor today, it’s vital there’s no let-up of a clean transformation of Britain’s energy system and so it can never again be at the mercy of global events through its reliance on fossil fuels.”

Dan Mc Grail, chief executive, RenewableUK:
“This windfall tax on low carbon power risks deterring investment, at a time when the Chancellor should be incentivising clean energy. Unlike in oil and gas, under this levy companies which are making significant investments in renewables will get no tax relief and will be hit by a higher windfall rate.
… “We need to attract more than £175bn in new wind farms and our supply chain over the course of this decade, so we need to make the UK one of the most attractive destinations for private investment in renewables. Ministers now need to work with the industry to ensure that the implementation of these plans ensures a level playing-field, rather than imposing unfair burdens on renewables.
…The current support mechanism for renewables, Contracts for Difference, is delivering new power cheaper than any other system, so it’s the right model to focus on as we move forward”.

Nick Molho, executive director, Aldersgate Group:
“The Chancellor understandably had to focus his attention today on tackling the gap in public finances. Despite this, it was positive to see the renewed commitment to the UK’s 2030 emission reduction goals made ahead of COP26 and to hear the Chancellor’s recognition that doubling down on low carbon power generation and increasing energy efficiency investments are both essential to address the cost of living and energy security crisis.
“We welcome the commitment for more funding on energy efficiency – although would add that this funding is needed before 2025 – and the creation of an Energy Efficiency Taskforce could also help tackle key policy gaps as long as it is conducted speedily.”

Rt Hon Philip Dunne MP, chair, Environmental Audit Committee:
“Boosting energy efficiency of our leaky housing stock is long overdue and I’m pleased that for the first time, the government has set an interim target to reduce energy demand in this country by 15% by 2030. This plugs a gap in the Energy Security Strategy which did not address reducing demand.
“I welcome the pledge of an extra £6 billion investment in energy efficiency measures but not until 2025. Tackling energy efficiency will be no easy feat: there are around 19 million homes across the UK in need of energy efficiency upgrades that contribute to a colossal 20% of our greenhouse gas emissions. To date, the government’s approach has been piecemeal and nowhere near sufficient to rise to the challenge. While positive in their ambition, the numerous schemes can be confusing to consumers to know what they are eligible for and the stop-start approach of programmes over the years has bruised industry. This must end: the opportunity of a properly coordinated energy efficiency programme can boost jobs, skills and growth in local economies and get us on the path to net zero.
“I hope the energy efficiency taskforce being brought in by the Business Secretary is up for the challenge.”

Jonathan Maxwell, chief executive and founder, Sustainable Development Capital:
“The government’s increased focus on energy efficiency, including a task force and an initial budget, is a welcome start, but the government must now act with urgency and at a sufficient scale to address energy losses in public, commercial and industrial buildings, industry, and transport, where most energy is used.”
… investment and action needs to take place right now if we are to address the energy security and cost crisis that we are facing today. The government should be leading by example and straight away, because the public sector itself is responsible for some of the largest sources of energy loss and waste in the country.”

Amy Norman, senior researcher, Social Market Foundation:
“It is welcome news that the Energy Price Guarantee will remain in place for the millions of households who would have otherwise faced much greater hardship. However, the choice to retain a universal system simply highlights the fact that our system of delivering support is both inadequate and inefficient.
“In all, the Chancellor’s plans mean low-income households who are outside the benefits system will see their average energy bill rise from April. Meanwhile, higher-income pensioners will receive additional cash support from taxpayers. This is not just a political choice but an administrative one – the social security system is the only real means we have for providing targeted support with energy, but that system isn’t able to identify all the millions of people who are in need of help with energy bills.
“This raises obvious questions about fairness and the responsible use of public money. As bills are expected to remain above pre-crisis levels for the rest of the decade, a sustainable policy for energy bills needs a more accurate and less wasteful way of delivering help.”

Mike Foster, chief executive, Energy and Utilities Alliance:
“The Chancellor confirming the energy price cap will see a whopping increase up to £3,000 in April will inevitably worry millions of hard-pressed families. Our recent consumer survey found 78% of Brits support keeping the price cap on energy bills in place, so an increase that plunges millions into fuel poverty is not what any households wanted to see.”

David Smith, chief executive, Energy Networks Association:
“We welcome the Chancellor’s focus on energy efficiency. He was right to combine short term measures to help the public find reliable, practical advice on avoiding wasting energy with longer term investment into delivering better insulation and upgrading boilers. The cheapest form of energy is that which you can avoid using, and these measures could help save consumers billions.
“To make these energy efficiency measures a reality we ask the government to engage with our members so we can work together to create the most effective approach for customers.”

Sizewell C
Charlotte Nichols MP, Co-Chair, Nuclear Energy APPG:
“Net Zero needs nuclear, and it’s great news that we finally have progress on this vital project for Britain’s energy security. 10,000 green jobs powering six million homes will be the backbone of our transition to a low-carbon economy. I’m looking forward to seeing more detail on Great British Nuclear in the coming weeks. We need a pipeline of projects drive the necessary recruitment and skills development to deliver the capacity we need to hit net zero by 2050.”

Tom Greatrex, chief executive, Nuclear Industry Association:
“Sizewell C will be one of the UK’s most important green infrastructure projects ever, and critical to the government’s commitment to strengthen energy independence, cut gas use and bring down bills.
“The UK now needs to urgently get on with building new nuclear plants alongside renewables to meet the targets set out in the Energy Security Strategy, and we look forward to Sizewell C contracts being signed in the next few weeks.”

Sue Ferns, senior deputy general secretary, Prospect union:
“The government’s reiteration of its commitment to Sizewell C is welcome but merely restating previous announcements is not enough. When are we going to get confirmation of the government investment decision? This is not something that can wait. Potential investors are seeking assurances now and without their commitment, dependent on a firm decision from the government, the project risks being holed below the waterline.”

Simon Tucker, global head of energy, utilities & resources, Infosys Consulting:
“Today was a missed opportunity to turn around the UK’s current energy situation. Expanding the windfall tax by 10% risks being counter-productive for the country’s energy transition – it’s a short term solution to a long term supply and demand problem, which has now positioned the UK as a short term, high tax energy location.
“Rather than promoting clean energy and putting focus and investment on the development of SMR’s and mini nuclear to create renewable resources and new jobs, the tax increase corners businesses into larger capital outlays. ….
“the announcement that Sizewell C will go ahead, again, provides the UK with no new initiatives. Despite the plant aiming to provide up to 7% of the UK’s total electricity needs, in the time it would take to come online it won’t provide any new, clean energy for another 10 years minimum – assuming there are no production hiccups.
“If the UK government wish to drive real change, every effort must be made to engage and audit the big players on clean energy investment. Improving this supply and reducing energy use will be key to navigating the uncertain months ahead.”

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