Energy industry ‘left in limbo’ by Budget

Chancellor Philip Hammond’s maiden Budget has left the renewable energy in “limbo” and has raised “more questions than answers”, according to energy industry leaders.

The Chancellor said the Treasury would replace the Levy Control Framework (LCF) with a new set of controls but further details won’t be provided until later this year.

Although the Government also repeated its commitment to carbon pricing, the industry will also have to wait until Autumn for details.

There was disappointment from the environmental lobby that there was no mention of energy efficiency, solar tax increases or the 25-year Environment Plan.

The Renewable Energy Association (REA) warned that the speech had left the low-carbon sector “in limbo”.

James Court, Head of Policy and External Affairs at the REA, said: “This budget was at best a placeholder for the renewables industry, resulting in more questions than answers.”

‘Starved of support’

Court added: “The decision over the Carbon Price Floor has yet again been kicked down the road and no details have been given for renewables and companies adversely affected by huge business rates increases.

“As the Treasury notes, ‘The UK already has one of the most competitive tax regimes for oil and gas in the world’, yet whilst end of life oil and gas get yet more help, future low-carbon technologies are starved of support.”

Emma Pinchbeck, Executive Director at trade body RenewableUK, pointed out: “Projects being thought about today will come on line in the 2020s, after the period covered by the LCF expires.

“We need to ensure that developers and investors in wind, wave and tidal energy projects have certainty so that projects can be built, economic returns can flow and consumers can benefit from the low cost of renewables.”

Solar and wind ignored

Richard Black, Director of the Energy and Climate Intelligence Unit (ECIU), noted: “The Chancellor’s statement on carbon pricing indicates that the government is preparing for a Brexit scenario in which the levers driving decarbonisation are pulled entirely nationally.

“If we come out of the European Emission Trading System, which is likely, a UK carbon price will be essential. But ministers need to say soon what the price will be, because energy companies are already signing power contracts for 2021.”

Toni Volpe, Chief Executive of Falck Renewables, said: “Not to keep energy bills lower by harnessing the UK’s potential for new generation from the cheapest power technologies such as onshore wind in windy Scotland is a missed opportunity for Brexit Britain.”

Paul Barwell, Chief Executive of the Solar Trade Association, added: “Government continues to cherry pick more expensive technologies while shutting solar out of competitive auctions, even as its Industrial Strategy prioritises cheap power.”

> Read the REA's reaction in full