Britain’s renewables industry has hailed today’s news about the UK Energy Bill as “a crucial announcement” that showed that there was “rock solid support across government for renewable energy”.
Ahead of the full publication next week of the UK government’s Energy Bill, it was revealed today that by 2020, energy companies will bring in – via increases to customers’ tariffs – an extra £7.6bn by 2020 to pay for the expansion of renewable energy, nuclear and other environmental measures.
There has been an immediate response to the news across the spectrum of renewable interests.
Maria McCaffery, chief executive of trade body RenewableUK, said today’s announcement provided the renewables industry “with exactly the kind of assurances we’ve been calling for”.
During recent months the Treasury and the Department of Energy and Climate Change have been at loggerheads on a host of issues, including funding for renewables, but McCaffery said today’s news “blows the last few months of political infighting completely out of the water”.
She said it was “proof that the Treasury really does get it” that the renewable energy industry “offers one of our best hopes for economic recovery”.
RenewableUK believes that the promise of £7.6bn will stimulate £40bn from investors.
McCaffery was also upbeat that the government has chosen to defer setting a decarbonisation target for 2030 until 2016. “The government clearly understands that there’s likely to need to be a decarbonisation target for 2030,” she said. “That’s great news, which will retain investor confidence in the long term.”
Utility E.ON said it looks as though the Bill is a good move in the right direction while Tony Cocker, chief executive of E.ON UK, agreed that today’s announcement would boost investor confidence.
He said it provided “important certainty to investors looking to deliver a secure, low carbon energy mix at an affordable cost to customers”.
Meanwhile Paul Barwell, chief executive of the UK’s Solar Trade Association expressed relief that the recent public conflict between coalition partners could now be consigned to the past: “After a damaging period of infighting, today the government has given a strong signal of its commitment to the renewables industry with clear financial backing.”
Chairman of the Committee on Climate Change, Lord Deben, said that the £7.6bn “is very positive. This should be sufficient to support investments in renewables required to meet the 2020 EU target and carbon budgets, together with demonstration of CCS and investment in nuclear new build”.
However he added that the CCC was disappointed that a carbon intensity target will not be set until 2016, after the next general election. “This leaves a high degree of uncertainty for investors and does not address widespread investor concerns raised in recent months,” he said. “It could adversely impact on supply chain investment and development of projects to come on line after 2020.”
Nuclear power interests in the UK have also reacted positively. George Borovas, head of nuclear projects at global law firm Pillsbury told Power Engineering International, “Long-term nuclear investors have been waiting for clarity and an illustration of commitment and will therefore welcome many of the agreements that have been announced. In particular, the long-term Contracts for Difference (CfDs) and the establishment of a new body to act as the single counterparty for the CfDs, will reassure many investors who have previously shown justifiable, uncertainty.
“Furthermore, the establishment of the Capacity Market and the enhanced Levy Control Framework also illustrate a commitment by the Government to support Britain’s much- needed nuclear revival.”
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