Spring budget: the industry responds

Rt Hon Philip Dunne MP, Chair, Environmental Audit Committee:
“Delays in grid connection have been stifling opportunities for developing Net Zero Britain. I therefore welcomed the moves, announced last year, to reform the planning system to surge ahead with the delivery of energy infrastructure, and for efforts to be taken to remove ‘zombie projects’ from the grid connection queue.
“Today’s Budget built on these important developments. From the Electricity System Operator tackling barriers to enter the queue, to Ofgem reviewing regulatory frameworks to reduce the time taken to connect, the reality of Net Zero Britain powered by low carbon and renewable sources at scale has been brought another step closer.
“The Committee looks forward to discussing these initiatives in detail with Ministers shortly as we press ahead with our inquiry into Enabling sustainable electrification of the UK economy.”

Rachel Solomon Williams, Executive Director, Aldersgate Group:
“As we await further details on plans to reform the grid connection process, we look forward to engaging with the new taskforce announced today to explore alternative dispute resolution mechanisms in planning. Planning can play a significant role in delivering much-needed homes, the energy infrastructure of the future and the restoration of our natural environment. However, to realise the Budget’s stated vision of long-term growth, it is essential that Government put forward a long-term industrial strategy, helping to drive investment across the whole of the UK and ensuring that the current and future skilled workforce needed to deliver a net zero economy.”

Ashutosh Padelkar, Senior Associate – Power & Renewables, Aurora Energy Research:

“The Spring Budget puts the Government’s ambition of delivering 50GW offshore wind by 2030 increasingly out of reach: over 18GW of offshore wind capacity will need to be procured in AR7. Even with a budget of over £1 billion and £800 million specifically for offshore wind, AR6 could procure between 3-6GW of offshore wind assuming strike prices between £73 and £50 per MWh in real 2012. If Berwick Bank secures planning consent before the Allocation Round, around 14GW of offshore wind capacity could be eligible – less than half of this will secure contracts.
“The primary reason why AR6 will fail to secure significant amounts of offshore wind capacity is that despite industry feedback, the government has decreased the reference price for the final delivery year from £27.79/MWh (real 2012) in AR5 to £24.13/MWh (real 2012).”

Sam Hollister, Head of Energy Economics and Finance, LCP Delta:
“Today’s announcement of £1bn to further invest in low carbon power is a significant step in the right direction given last year’s failure to attract any bids from offshore wind developers that was a major blow for the industry and consumer alike. The government will hope that this budget, larger than any previous budget, will be enough to deliver sufficient offshore wind investment to meet the government’s 50GW target by 2030. LCP Delta analysis expects the £800 million dedicated to offshore wind could likely procure approximately 4-6GW in the upcoming auction. This is certainly a welcome development given last year’s failed auction. However, it may not be enough to get the UK back on track with time running out to build the additional 23GW needed by 2030.”

Alasdair Johnstone, Energy and Climate Intelligence Unit:
“At a time when the US and EU are competing over investment clean industries, there was little in here to attract investment in clean industries. Speeding the deployment of renewables, the insulation of homes, the rollout of heat pumps and the uptake of EVs would also boost our energy security, protecting the UK from volatile oil and gas prices.”

Sue Ferns, Senior Deputy General Secretary, Prospect union:
“Today’s Budget fell far short of the action needed to accelerate the clean energy rollout and create good jobs. Progress on future nuclear sites and small modular reactors is welcome, but the Chancellor had no update on the urgent task of getting Sizewell C over the line. And while today’s contracts for difference announcement shows the government has learned from last year’s offshore wind disaster, we are yet to see a proper industrial strategy to deliver good jobs across the renewables industry.”

Dan McGrail, Chief Executive, RenewableUK:
“Although we welcome this budget increase, as it recognises that global economic conditions have changed, the Treasury has missed the opportunity to maximise the amount of offshore wind capacity which the UK could have secured in this year’s auction for new clean energy projects.
“We have more than 10GW of capacity eligible to bid in this summer. Building this is essential if we’re to make up lost ground from last year’s auction and create the substantial pipeline required to accelerate supply chain investment and growth in the UK. This funding will only secure 3-5GW.

“This 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 to provide goods and services for projects here and abroad will not be maximised”.

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