Unlike nuclear and carbon capture, wind and solar energy received no explicit additional support in the Chancellor’s spring budget, prompting a backlash from renewable energy body RenewableUK.
“Today’s budget does not create the framework needed to mobilise investment and turn the UK into a clean energy superpower,” said Ana Musat, executive director of policy and engagement at RenewableUK. “It will not enable the renewable energy industry to build vital new projects much faster or grow supply chains… we need a much bigger response to match the incentives being offered to renewable energy developers by the US and the EU – this wasn’t forthcoming today,” she added.
In his budget, Hunt unveiled boosts to nuclear energy, which he said would benefit from the same subsidies as renewables and be supported by the newly created Great British Nuclear, a state-run organisation he claimed would promote nuclear power projects in the UK.
Up to £20 billion (€22 billion) would also be made available for carbon capture and storage, Hunt said.
Industry reaction
Ørsted – which had recently warned that offshore wind developers may return power deals secured in the UK’s most recent contract for difference (CfD) round – told Windpower Monthly that it was “disappointed” with the budget.
It argued that the government’s proposals for tax relief on large-scale infrastructure projects do not go far enough, and claimed that it faces a challenge financing its Hornsea Project Three. The Danish offshore wind giant had secured a CfD for the project at auction last year.
Ørsted explained: “Under the government’s proposals, we understand long-life infrastructure projects such as offshore wind farms would only qualify for a 50% capital allowance for three years. Furthermore, the lion’s share of capital expenditure on Hornsea 3 and other forthcoming offshore wind projects will come outside the qualifying scope and timeframe.
“We remain committed to doing all we can to reach a final investment decision on Hornsea 3.”
Offshore wind developers James Fisher Renewables said the government must help meet the challenges the industry faces.
“We welcome the chancellor's £20bn of funding for carbon capture announced today, but we'd urge the government to think bigger picture to drive the renewables industry forward. We’re at a crucial turning point in the country’s offshore wind journey, and industry investment is only one piece of the puzzle,” said Mike Hodgson, strategy development manager at the firm.
Additional reporting by Craig Richard
