No new funds will be made available for the Levy Control Framework, which funds new renewable electricity projects, until at least 2025, according to budget documents. Auctions planned to 2020 will go ahead.

There was also little clarity on a long-term trajectory for the Carbon Price. The total price charged for carbon emissions in the UK is “set at the right level”,  budget statements said. The total price combines the emissions cost under the EU Emissions Trading Scheme and the UK’s Carbon Floor Price, and the government said it would “continue to target a similar total carbon price until unabated coal is no longer used.” That is expected to be 2025, although the industry is still waiting for final confirmation of that date.

Instead the chancellor focused on a shift to electric vehicles. It promised to regulate to support the wider roll-out of charging infrastructure; invest £200 million (to be matched by private sector) in a Charging Investment Infrastructure Fund; and commit to electrify 25% of cars in central government department fleets by 2022. It will also provide £100 million to guarantee continuation of the Plug-In Car Grant to 2020.

Responding to the budget, James Court, head of policy and external affairs at the Renewable Energy Association, said:

“The UK government seem to be turning their back on renewables by announcing no new support for projects post 2020 and a freeze on carbon taxes. This could see a hiatus in much needed infrastructure development. Considering this is coming only a couple of months after the much vaunted Clean Growth Plan, it’s hugely disappointing. 

“The Chancellor talked about embracing the future in his speech, yet hid away the details that he was blocking all renewables to market. Onshore wind and solar are already cheaper than new build gas, and we have seen huge cost reductions happening in offshore wind, energy from waste and biomass. These are the technologies of the future and the Government should be backing them, not blocking their progress.

 “The renewable power and heat sectors are urgently calling for clarity around how the Government intends to bring forward new capacity.”

RenewableUK chief executive Hugh McNeal was more positive. He said, “The renewable energy industry has a little more certainty than it did this morning. The existing budget of £557m remains intact, and there is a commitment to maintain the Carbon Price Floor at current levels until coal comes off the system. The removal of an annual cap on the Levy Control Framework reduces the risk of a boom and bust cycle. 

“… what is missing is the ambition to take full advantage of the UK’s global-leading renewables industry at such a crucial time for our country. Onshore and offshore wind are the cheapest options for new power in the UK and support thousands of jobs across thecountry, while our marine renewables and floating offshore wind sectors offer new industrial opportunities for the UK to be a global leader”.

Other responses

Andrew Hedges, climate change and clean energy partner,  Norton Rose Fulbright: “The new policy for budget controls for renewable energy makes it clear that, other than the 2019 CfD allocation round, the availability of significant new budget for offshore wind is unlikely before 2025.

 “…any budget for new projects would need to come from changes to the assumptions regarding use of the existing allocated budget. That could arise, for example, from existing projects to relinquish their CfDs or a change to underlying assumptions such as a long-term increase in wholesale prices (making CfDs cheaper).

 “A small window may be open for offshore wind however as Treasury concedes that, new levies may still be considered where they have a net reduction effect on bills and are consistent with the government’s energy strategy. This may well be a key part of negotiations in any sector deal for offshore wind under the Clean Growth Strategy. 

 “For onshore wind and solar PV, this simply confirms the negative outlook for future support and appears to dash any slim hopes for nuanced solutions such as a CFD allocation for Scottish onshore wind. For these technologies, subsidy free solutions are likely to become more important, with developers looking to other options such as corporate renewable power purchase agreements to secure revenue certainty for new developments.”

Nick Molho, executive director, Aldersgate Group: “It was good to hear further support for electric vehicles and charging infrastructure, and in ensuring the UK has the skills required to benefit from the job opportunities of the future.

 ”However, the lack of clarity and progress on the future of low carbon power investments and energy efficiency standards in new buildings is disappointing. To reduce power sector emissions cost-effectively and continue to grow renewable energy supply chains, the UK needs a policy environment that allows it to deploy mature low carbon technologies such as onshore wind without subsidy, increase its ambition on offshore wind in the 2020s and keep the door open to improvements in new technologies. The announcement that there will be no new low carbon electricity levies until 2025 mustn’t get in the way of that.”

John Sauven, chief executive, Greenpeace: “Despite the Chancellor’s pride in the UK’s climate leadership, hidden away in the unannounced text of the budget, he quietly revealed this was one of the least green budgets ever, because there will be no new money for renewables until at least 2025. This is the death knell for new renewable energy like tidal, wave and geothermal technology despite the huge economic opportunities they could bring.”