Chancellor George Osborne’s UK Budget statement on 18 March included key measures for the UK’s electricity industry. It prompted a series of announcements by the country’s Department of Energy and Climate Chance, DECC.
The main DECC announcements included a boost for the plan to create tidal lagoons in the Bristol channel in the west of the country. "Tidal lagoon energy" said DECC "could provide up to 8% of the UK’s electricity and the government is keen to explore its potential … we plan to enter into the first phase of bilateral negotiations on a Contract for Difference for Swansea Bay Tidal Lagoon. This will help us establish if the proposed project is both affordable and represents value for money for consumers." In addition £20 million of new funding will be used to support collaborative industry geoscience that will improve understanding of the UK Continental Shelf. To help reduce electricity bills the government will introduce competitive tendering for onshore transmission assets. This could reduce the cost of building transmission assets by up to 12%. And the National Grid and its Belgian counterpart Elia have agreed to build a new 1GW electricity interconnector between the two counties. This will be operational by the end of 2018.
The trade association representing the wind, wave and tidal energy industries, RenewableUK, liked the marine energy reference. Its Wave and Tidal Development manager Dee Nunn said: "This is a significant step forward towards building the first tidal lagoon of its kind in the world. This pioneering project would ensure that Wales and the UK stay at the forefront of marine energy, providing clean electricity for 120 years and creating 2,000 jobs in the construction phase alone.
"By enabling this project to go ahead, the government will also unlock the potential for other, larger tidal lagoons to be developed.
However, he expressed disappointment at the chancellor’s announcement that he will freeze a tax on carbon emissions created by fossil fuels – the Carbon Price Support – at its 2016/17 level for the rest of the decade. The chancellor claimed that investment in new power sources, including renewables, would not be impacted as a result. But this freeze will remove any contingency in the support budget for renewables, increasing risk for investors.
Breenpeace too was less than impressed. Commenting on the ‘lack of vision’ from George Osborne executive director of Greenpeace John Sauven said: " The most notable thing about this budget was its lack of ambition in connecting the economy with the environment, one of the key drivers of growth globally. Four years ago we were told it will be the ‘greenest government ever’. Today, the absence of any green growth strategy or measures to deal with the risks of climate change is a damning indictment of a government that has clearly lost its way."
The organisations chief scientist, Dr Douglas Parr, commented that the cecision to freeze the carbon floor price was "… throwing a multi-million pound bung to coal plants. Coal is the dirtiest and most damaging fuel on the planet and it should be left in the ground not given a financial leg-up. Freezing the carbon floor price without further measures to ensure that coal is driven off the grid shows that this government has caved into pressure from the coal lobby and downgraded climate action."
The Confederation of British Industry was more up-beat, but with reservations. Its director-general John Cridland, commented "The CBI has pushed hard for this significant and much-needed energy package that will help keep manufacturing jobs in the UK, while underpinning vital investment in new energy. Our energy intensive industries are crucial to building a low-carbon economy and it’s right the government is taking action to mitigate the cost for these firms. But many more businesses across the country are struggling with high energy costs and these measures will help support key sectors against tough international competition. We now need to see action from ministers to secure an ambitious EU-wide 2030 emissions reductions target to drive investment in our low carbon future. "
