DECC budget slashed as part of spending cuts

The Chancellor has slashed the budget for the Department of Energy & Climate Change (DECC) during his Autumn Statement and Comprehensive Spending Review (CSR).

George Osborne cut DECC’s budget by 22% and axed funding for research into carbon capture and storage (CCS).
He reaffirmed the UK Government’s commitment to the Renewable Heat Incentive (RHI) by extending it to 2020-21 but sucked £700 million from its budget.

Osborne also gave energy-intensive industries – such as steel making – an exemption from environmental levies.

£500m innovation budget

A total of £250m was promised for research and development work on nuclear power.

DECC’s innovation programme will also be doubled to £500 million over five years to fund the development of new technologies.
Energy Secretary Amber Rudd said: “As we transition to a low-carbon economy as cost effectively as possible, finding new sources of energy that are cheap, reliable and clean is essential, which is why we are boosting our spending on innovation and backing the industries of the future.

“We will also double our spending on renewable heat and electricity over the next five years as we invest in new infrastructure fit for the 21st century to ensure our long-term energy security.”

‘Big gap’ remains

Lawrence Slade, chief executive of trade body Energy UK, said that the CSR and Rudd’s recent re-setting of energy policy provided “a step in that direction”.

“But there remains a big gap between the situation now and what the country needs to achieve in its energy policy,” he said.

“A lot of work remains to be done to map a realistic course that maintains secure energy supply to homes and businesses while meeting our international climate responsibilities and, crucially, ensuring energy remains affordable for everyone.”

Niall Stuart, chief executive of trade body Scottish Renewables, added: “Overall, the spending review still leaves us with no real clarity on the crucial issue of how government will support the growth of renewables beyond 2020.

“The Committee on Climate Change’s latest reports suggest we need to double the output of renewable power between now and 2030 if we are to meet carbon budgets, and we need to start planning how we intend to do that now.”

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