Friday, 24 April 2009

Darling Puts His Money Where His Mouth Is!

Alistair Darling, Chancellor of the Exchequer, announced the new 2009 Budget on Wednesday 22nd April.

Whilst taxes have been toughened on the usual suspects – cigarettes, alcohol, fuel – and increased significantly for those earning at the higher end of the market (£150k plus now being taxed 50% and pension loop holes closed up), the overall message towards the green and low carbon sectors was very positive: Brown and Darling are making it clear that they are serious about their commitment to Renewable Energy and Low Carbon initiatives. They have stated that the UK will become the first country to commit to legally binding targets for reducing CO2 (34% reduction by 2020).

Here is a summary of the financial investment into the Low Carbon and Renewable Energy sectors:
  • £525m to be invested into the development of Offshore Wind farm development between 2011 and 2014. The money will be raised through the Renewable Obligation. Darling’s money is going behind Offshore Wind because it is the closest to generation. Nuclear will take significant time to build; tidal is still in early stages; geothermal opportunity in UK is limited.
  • Review of ROC (Renewable Obligation Certificate) scheme – Electricity companies will receive 2 ROCs for every MWh of energy they buy from an offshore wind farm (increased from 1.5 ROC) for the financial year 2009-2010. This will fall back to 1.75 ROCs 2010-2011.
  • Opportunity to benefit from up to £4bn of investment into renewable infrastructure projects from the European Investment Bank (EIB). This could translate to £1bn of development in the UK.
  • £375m to support energy efficiency initiatives in businesses, public buildings and homes in the UK through various schemes including £100m of funding for low cost loans delivered through the Carbon Trust. 
  • £70m of investment into micro-generation or small scale renewables. 
  • £405m of investment to go into developing “low-carbon energy and advanced green manufacturing" in the UK. This will focus on opening up a “green” supply chain in the UK to aid the development of low carbon technologies in the UK.
The government also reaffirmed its support of CHP (Combined Heat and Power) with its long term strategy being announced later this year. 

Adam Bruce of the BWEA said: 
"This package of measures deserves a welcome from our industry, and is in line with proposals that we have been working through with government. It addresses the short-term economic hurdles we faced due to the fall of the £ against the €, and the post-Lehman collapse in project finance.
It also restates the Government's long-term commitment to the renewable energy sector, and should enable us to unlock up to £10bn of private sector investment in wind and marine energy projects over the coming few years."
Overall it looks like Darling’s Budget will receive a warm welcome from the Renewables community. Is this enough?

As always, I would be very interested in hear your views directly.

Leave your comments below or find me via twitter, LinkedIn or directly by email.

Clare Buxton
Wind Sector Lead

Image by John-Morgan

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