Renewables Reassured by The Chancellor's Spen

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News article

Renewables Reassured in Spending Review

October 2010

renewable energy news

On the 20th of October fears were laid to rest over the potential cuts to renewable funding in an announcement by the Chancellor, George Osborne in the Spending Review.

The Government has announced that renewables will be “ruthlessly prioritised” to provide the most efficient use of Government funding. Commitments have now been made that the renewable heat incentive (RHI), a Green Investment Bank and £200 million for the development of offshore wind, have been proposed.

Other incentive schemes have not faired so well with the Feed-in Tariffs set to be re-focused favouring the “most cost effective” technologies to save approximately £40 million in 2014 to 2015. However, it is reassuring that the implementation of these schemes will not come before the scheduled review of the tariffs in 2013, unless higher than expected deployment requires an earlier review.

RHI
One of the extensively lobbied policies has been the renewable heat incentive, which saw Chancellor, George Osborne, pledging £860 million to end speculation and uncertainty over the proposed scheme. Confirming funding for the subsidy measure.

The announcement has also confirmed the Government will be funding the scheme in place of the speculated implementation of a renewable heat levy. Indications were made that the April 2011 introduction date promised by the previous administration will not be met, with a treasury document claiming that it will be introduced from 2011 to 2012 with speculation of a new July introduction.

WIND
Offshore Wind has benefitted from a pledged £200 million for low carbon technologies including proposals for manufacturing infrastructures at port sites.

LENDING
It has also been revealed that the Government will introduce a new Green Investment Bank with £1 billion of funding, to aid in money raised by the private sector and sale of Government owned assets.

The proposed Green Bank will make investments decisions independent from political control and will employ private sector skills and experience. The Government hopes to complete works by Spring 2011.

CONCLUSION
With the Chancellor’s proposals considered, the initial reassurance of the Government’s pledge to renewable energy has been welcomed by the Industry. However, from a landowner’s perspective, considering investment in any renewable project, a call for urgency has never been so clear. With the imminent review of the Feed-in Tariffs in 2012 and implementation in 2013, any considered projects must be started to ensure that projects can be budgeted with the existing Feed In Tariff rates before any amendments likely to reduce rates.
 

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