Autumn Budget: Twigged

Highlights include grid connection reforms which will allow more renewable energy projects to be connected to the grid, no mentions of tidal or onshore wind and a continuation of the Energy Profit

Compared to recent budgets, this one is relatively steady. But when it comes to energy, especially energy support this winter, the Chancellor has left much to be desired.

The highlights include grid connection reforms which will allow more renewable energy projects to be connected to the grid, no mentions of tidal or onshore wind and a continuation of the Energy Profits Levy until 2028.

Photo by Samuel Regan-Asante on Unsplash

The key announcements:

1. Powering Up Britain

   1. Plan for 8 priority areas to deliver energy security, including targets such as 95% clean electricity by 2030.

   2. Aims to mobilise up to £100 billion of private investment over the decade in sectors like offshore wind, hydrogen, solar and nuclear - notice how there was no similar support announced for tidal or onshore wind.

   3. Sector-specific plans to support industries like manufacturing, fossil fuels, construction etc. to decarbonize operations over the next 15 years. Details here.

2. Reduce UK Emissions Trading Scheme (ETS) permits available by 45% between 2023 and 2027 and extend the scheme to cover emissions from domestic maritime and energy from waste.

   1. P.S. This is a controversial scheme that allows companies to trade their available emissions budget to companies needing more emissions allowance. Supporters say that this encourages staying within a collective emissions budget. However, this makes it easier to evade individual responsibility and commercialising emissions is ethically questionable.

   2. So all in all - reduction of ETS permits is welcome.

3. There will be an exemption for the Electricity Generator Levy for new renewable energy projects.

4. Grid Connection Reforms: Reforms to drastically reduce grid connection waiting times for viable renewable energy projects.

   1. This should free up over 100GW of connection capacity so projects can connect sooner without delays.

   2. This could cut the overall connection delays from 5 years currently to no more than 6 months.

5. There are new measures to halve the time it will take to build new electricity grid infrastructure - to 7 years.

6. Oil and Gas Fiscal Regime Package

   1. A package covering short, medium and long term for the oil and gas sector, including ending the Energy Profits Levy and details on the Energy Security Investment Mechanism.

   2. This provides relief to companies if oil/gas prices are exceptionally high to promote investment.

   3. The age-old argument cited for this is “energy security” - but of course, we know that oil and gas are not necessary for this to be guaranteed.

7. Green Industries Growth Accelerator

   1. £960 million in funding has been announced to support clean energy manufacturing capacity.

8. Basically nothing in the way of energy support (in the forms outlined in yesterday’s EcoTwig ;) for households this winter.

9. Expanding Energy-Saving Materials VAT Relief to more technologies like heat pumps.

10. Only residual funds of £295 million in 2023-24, and 2024-25 budgets to support energy bills under the Energy Bills Support Scheme.

    

    Photo by Jason Blackeye on Unsplash

So there it is — the 2023 Autumn budget. I’m eager to see how the plans for the national grid map out, as it is sure to add plenty of capacity for renewables. But the continuation of the Energy Profits Levy shows that the Treasury is still clinging on to the dark and dirty profits of oil and gas. Long-term funding for wind and solar is also a step in the right direction, but how far forward can we get if we are leaving tidal and onshore behind? Not very, I bet.

Onwards and upwards - twig’ you later.