The measures include an additional £150 million support for low-carbon technologies, including a further £50m to encourage manufacturing and testing facilities in the growing offshore wind industry. An investment of £15m will go to the New & Renewables Energy Centre (NaREC) to develop a unique UK capability for the testing of wind turbine blades.
“At this very moment, UK negotiators in Copenhagen are pushing hard for a strong global deal on climate change, so it is more important than ever that the UK shows it is practising what it preaches,” says Secretary of State for energy and climate change Ed Miliband.
“In the pre-budget report, we have announced funding for a number of practical measures that support economic recovery while cutting emissions; this shows that tackling climate change can be in our economic as well as our environmental interests.”
Other measures announced by the Chancellor was confirmation that two Renewables Obligation Certificates will be awarded for every MWh of offshore wind capacity that is installed and accredited between April 2010 and March 2014, and greater certainty for investors by moving to 10% headroom when setting the Renewables Obligation from 2011.
“Tackling climate change will bring new opportunities for new low-carbon industries,” chancellor Alistair Darling told the UK Parliament. “Today, I can redirect existing funding, and invest in wind power, renewable energy and other green industries.”
The government will provide an income tax exemption from feed-in-tariffs for people who generate small-scale green or renewable power for use at home, such as the installation of a solar PV panel that would be worth an average of £180 in forgiven tax. It will also implement energy efficiency measures to reduce energy costs in the public sector by at least 10% and helping schools, hospitals and governments to save £300m a year by 2013 while reducing carbon emissions from the public sector by 4 Mt over the lifetime of the measures.
“Overcoming climate change is the great project of this generation,” Milliband explains. “We have a unique opportunity, as we recover from the global economic downturn, to ensure that the UK builds a low carbon economy fit for the future.”
The package of proposed pre-budget measures flows from the actions enunciated by the UK government in its Low Carbon Transition Plan in July.
Other measures include a firm commitment to support four commercial-scale demonstrations of CCS (carbon capture & storage) technology on coal power generation in Britain, and an extra £200m to improve energy efficiency and tackle fuel poverty for low-income residents. It will reduce the rate of relief from the Climate Change Levy for companies with Climate Change Agreements from 80% to 65%, and establishing an agency to leverage further investment in low-carbon and renewable energy projects.
The Department of Energy & Climate Change is “enabling the energy sector’s shift to the trinity of renewables, new nuclear and clean coal.”
The pre-budget report (PBR) is one of two wide-ranging economic reports presented to Parliament by the Chancellor each year. In spring, the annual budget statement includes a detailed assessment of the economy and announces changes to taxes and new spending measures; the PBR provides a progress report on what the government has achieved since the previous budget and sets direction of government policy for the next spring budget.