Chancellor George Osborne stood up in the House of Commons at 12.30pm today to detail the coalition Government's Comprehensive Spending Review. Some key points:
The efficiency of feed-in tariffs will be improved at the next formal review, rebalancing them in favour of more cost effective carbon abatement technologies. This will save £40 million in 2014-15. Support for lower value innovation and technology projects will also be reduced, saving £70 million a year on average over the Spending Review period.
Therefore feed-in tariffs will be refocused on the most cost-effective technologies in 2014-15. The changes will be implemented at the first scheduled review of tariffs unless higher than expected deployment requires an early review.
The Renewable Energy Association’s (REA) PV Specialist Consultant, Ray Noble said of the review, “This is excellent news for the UK solar industry. It’s exactly what the market needs in order to fulfill its fantastic potential. The outcome of today’s review could not have been better.”
The review also outlined that over one billion pounds will be set aside for the Green Investment Bank, however the Chancellor said that he hopes much more will be invested from private sector and future government asset sales. By injecting such an amount into this bank, the coalition hopes to create jobs and reduce carbon emissions in order to meet the country’s 2050 emissions targets.
The government will also go ahead with the planned Green Deal, which has no upfront cost to homeowners, thus scrapping Warm Front, which spent £280m a year on improving energy efficiency for poorer households.
The Renewable Heat Incentive, funded from AME, will be introduced as planned from 2011-12. This will ensure the UK meets its 2020 renewable energy targets while making efficiency savings of 20%, or £105 million a year, by 2014-15 compared with the previous Government’s plans.
The Department of Energy and Climate Change (DECC) settlement includes:
- Up to £1 billion of investment to create one of the world’s first commercial scale carbon capture and storage (CCS) demonstration plants;
- Over £200 million for the development of low carbon technologies including offshore wind technology and manufacturing at port sites;
- Increased incentives for low carbon energy generation through the Renewable Heat Incentive;
- Enabling households to improve the energy efficiency of their homes at no upfront cost through a Green Deal; and
- Overall savings within DECC’s core resource budget of 30% in real terms by 2014-15, including through cutting lower value projects and focusing on key priorities.
The Spending Review settlement enables DECC to prioritise spending in areas where it can have most impact. For example, new low carbon technologies have the potential to contribute to growth as well as to emissions reductions. The Chancellor also announced that next month, the DECC will outline its reform plan for the next four years.
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