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Renewables Industry responds to budget

The Renewable Energy Association, which represents the UK renewables industry with some 600 members, responds to today’s budget.

Philip Wolfe, Director General of the REA said, “The economic storm clouds are clearly thundering through this budget, but at least they have a green lining. We are glad the government has sought to respond to areas we identified as critical and these measures should help prevent contraction in the renewables industry.”

Main measures for renewables

The budget contained the three main measures the REA had highlighted for renewables:

o Up to £4bn of finance for new renewable energy projects in the UK will be provided by the European Investment Bank responding to serious difficulties in access to finance.

o The number of Renewables Obligation Certificates allocated to new offshore wind projects will be increased to 2 per MWh for 2010/11 and 1.75 in 2011/12 before reverting to the 1.5 ROC/MWh level. The government valued this at £525m. Projects eligibility is subject to specified criteria.

o The decentralised renewables sector will receive £70m of new grant support to bridge the period to the introduction of the new renewable energy tariffs; £45m for the Low Carbon Buildings Programme and £25m for community heating.

This matches the key proposals made in the REA’s pre-budget submission to the Treasury, but provides less hard cash.

In addition the budget offers

£10 million in new grants for anaerobic digestion to turn organic waste into green energy
Authorising £4bn of networks investment by the private sector to improve access for renewable energy (a 50% increase on 5 years ago)
£405m to support the Low Carbon Industrial Vision including £250m for ‘advanced industrial projects of strategic importance’.
£50m for the Technology Strategy Board for future growth industries including low carbon technology.
Many of the provisions are caveated with pre-conditions and eligibility criteria that need to be spelt out before industry can be sure these measures will bite.

A green budget?

The Association had also supported Lord Stern’s call for 20% of stimulus packages to be devoted to green investment.

“Although the new announcements in this budget move towards the 20% level, the UK is still failing the ‘Stern test’ overall,” said Mr Wolfe. “We are allocating substantially less to sustainable energy during the global downturn than other countries and this will leave our world class renewables businesses at a competitive disadvantage. The additional £405m support for the Low Carbon Industrial Strategy may help bridge this gap, but there are so few details it is hard to know.”

Email: jrobinson@r-e-a.net


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