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UK Budget 2009: reaction

How has the industry reacted to the 'low carbon', renewable energy provisions in the UK's Budget 2009?

Not surprisingly, the wind industry is among the happiest, being one of the big winners. The proposals include a potential £525m of new money through a review of the support mechanism for offshore wind. The Chancellor also announced a new deal with the European Investment Bank to provide a package of up to £4 billion for investment in renewable infrastructure projects, as well as a one year across the board doubling of capital allowances from 20% to 40%.

Adam Bruce, British Wind Energy Association (BWEA) chairman 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.”

Another influential organisation was also relieved with some of the provisions, fearing it could have been worse. Philip Wolfe, director general of The UK's Renewable Energy Association (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.”

But he also remained cautious and believes more should be done: “Although the new announcements in this budget move towards the 20% level, the UK is still failing the ‘Stern test’ overall,” said 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.”

What they thought: Comments on UK Budget 2009

  • Tom Sexton, Aon Renewable Energy: "[this has been] an extremely positive step for not only the environment but for businesses who have shown an interest in this field but have been cautious in investing in the technology. These measures will greatly assist in increasing the viability and profitability of projects to ensure a larger part of the UK’s energy requirements are sourced from wind, wave, tidal and solar developments";
  • Chris Bowden, Utilyx: "The Chancellor’s plans for investment in wind power and other renewable resources are a positive step forward but the practicalities of energy supply cannot be ignored. The UK is scheduled to lose a significant proportion of conventional generation capacity by 2015 and with the government yet to finalise its renewables strategy, the UK could be facing an imminent shortfall in supply. Although no one is disputing the cost of climate inaction, the UK’s renewable energy targets are simply unattainable. Our future energy mix must draw from a diverse range of resources if we are to maintain security of supply";
  • Michelle Thomas, Eversheds: “Lord Stern commented yesterday that this Budget would be 'a critical test of the consistency and credibility of the Government's policies on climate change'. The additional funding for offshore wind, energy efficiency schemes and green manufacturing while welcome will not be what many of those responsible for developing clean energy will have anticipated. The risks and capital cost associated with developing offshore wind warrant a much higher level of Government contribution".


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Energy efficiency  •  Green building  •  Policy, investment and markets  •  Wave and tidal energy  •  Wind power