Posted on: 29/11/2016
Chancellor Philip Hammond used his maiden Autumn Statement to maintain the cap on Carbon Price Support (CPS) rates.
The Chancellor said the rate of the CPS – which helps underpin the price of carbon at a level that supports low-carbon investment - would remain at £18t/CO2 until 2020-21.
Trade body Energy UK welcomed the move with chief executive Lawrence Slade saying “predictable carbon pricing is a key element in making sure that investors in low carbon generation can plan with confidence”.
“However, investors need to plan many years ahead and we look forward to working with government on the long term direction for carbon price support and the Levy Control Framework."
But Jeremy Nicholson, Director of the Energy Intensive Users Group, wanted to see the tax scrapped.
“Carbon Price Support continues to undermine the competitiveness of UK industrial electricity users,” he said. “The government should use the months ahead to plan for its phase out.”
In other reaction to the Autumn Statement, renewable energy groups welcomed support for electric vehicles including a 100% first year allowance for businesses installing EV charge points but they called on Hammond to see the wider picture.
James Court, Head of Policy and External Affairs at the Renewable Energy Association, said: “We urge him to remember that the development of these transport technologies are not emerging on their own but are part-and-parcel of a wider shift to a higher-tech, lower-carbon world.
“Decarbonising transport through electrification requires the decarbonisation of the electricity system as well.”
Paul Barwell, the Solar Trade Association’s (STA’s) Chief Executive, added: “We welcome the additional funding for infrastructure and electric vehicles – a “smart” energy system will deliver enormous savings to business and consumers.”
But the STA criticised Hammond for maintaining “a tax regime that is rewarding investors in fossil fuels over solar energy”.
‘Light’ on long-term strategy
Critics said the Autumn Statement did not answer many of the energy industry’s current questions.
Consultancy firm Utilitywise said: “The statement was light on any long-term strategy or direction for the UK energy industry.
“There were no references to the opportunities and benefits offered by energy efficiency.
“Details of future investment plans for interconnection, battery storage, carbon capture and demand response are all still unclear at this time.”
> Download a copy of the Autumn Statement