Autumn Statement 2015: the industry reacts

The Chancellor has made his Autumn Statement, announcing sizeable budget cuts to both the Department of Energy and Climate Change (Decc) and the Department for Environment, Food and Rural Affairs (Defra).

The renewables industry says it is “cautiously optimistic” about the future of the renewable heat incentive (RHI), but has condemned the government’s continued support for shale gas and its apparent lack of support for energy efficiency.

What’s more, concern was expressed over the lack of clarity on how government will support the growth of renewables beyond 2020.

Here’s how the industry reacted to the Chancellor’s Autumn Statement:

Nina Skorupska, chief executive, Renewable Energy Association

“We welcome the government’s commitment to renewable heat and pleased they have listened to industry and our members, but the devil will be in the detail.

“Our members recognised the need to make savings and presented to Treasury and Decc how we could optimise the RHI budget. A £700 million cut is large, but we look forward to working with the government on reforming this crucial area.

“We still have a large challenge in hitting our renewable heat targets, and the RHI alone won’t achieve it, heat networks, energy efficiency and green gas still have a large part to play.”

Doug Parr, policy director, Greenpeace

“One of the ways George Osborne said he intends to cut fuel bills is by slashing the energy efficiency fund. This is nonsensical as this fund actually helps people to cut their bills and keep warm by draft proofing and insulating their homes. Cutting the fund simply means fewer homes will be kept warm. The number of people dying from cold in their homes is rising and this short-termist approach to that horrible fact will do nothing to help that.

“George Osborne announced that spending on renewable energy is to double. This is not new money and is the existing fund for supporting renewable energy agreed under the coalition government. There is now over £1 billion available for renewable heat and this is good news given wider cuts in government spending – the challenge is to spend this money well so that it genuinely reduces carbon in well-delivered projects. 

“Chancellor’s promise of a wealth fund for fracking flies in the face of what local people want. Given that support for fracking is at an all-time low it’s no surprise that the Chancellor is resorting to little more than bribery to convince the British public to support his pet project.”

Charlotte Morton, chief executive, Anaerobic Digestion and Bioresources Association

“We welcome the government’s commitment today to delivering renewable heat. Indigenous, baseload green gas will continue to be a vital part of UK heating, and ultimately biogas alone has the potential to deliver 30 per cent of domestic gas demand. Making RHI funding available for new projects to 2020/21 will clearly help support our industry’s ambition.

“The Chancellor’s decision to delay significant growth within the RHI budget next year, however, leaves uncertainty around the level of funding which will be available for new projects in 2016.  It’s challenging for any industry to endure a period of hiatus where jobs and investment are put on hold – or even at risk – as businesses wait for government policy to catch up with growth capability.

“Given that the UK still needs 20TWh more renewable heat by 2020 to meet the government’s 12 per cent target – with [anaerobic digestion] able to deliver a third of that – delays in biomethane deployment will jeopardise our ability to meet this target.

“And of course delays impair the industry’s ability to improve energy security as the UK becomes increasingly reliant on imported gas from volatile parts of the world – a concern which was raised during yesterday’s House of Commons Energy and Climate Change Committee hearing with the National Grid.”

Ed Matthew, Director, Energy Bill Revolution

“Despite pledging to re-build Britain, the Chancellor has failed to allocate any of the £100 billion infrastructure fund to help re-build the 21 million British households with poor energy efficiency.  What is worse is that he has cut the existing and inadequate funding for energy efficiency under the Energy Company Obligation.

“This condemns millions to continue living in cold homes, damages our energy security and makes it all but impossible to meet future carbon budgets.  It is short term thinking of the worst kind that will cost thousands of lives, lead to higher energy bills in the long term and increase pressure on the NHS.”

Dale Vince, founder, Ecotricity

“Amber Rudd said last week that large energy ‘generators should pay the cost of pollution’, yet today George Osbourne is saying ‘large energy consumers should not’.

“Renewable energy generators now have to pay the climate change levy – designed to tax pollution that they don’t even produce – yet big polluters that do cause climate change are going to be exempt from paying to limit carbon emissions through renewable energy.

“It’s madness.”

Niall Stuart, chief executive, Scottish Renewables

“We are pleased to see the continuation of the Renewable Heat Incentive, though we will need to work through the detail of the expected reforms and the intention to bring down spending by around £700m by 2020/21. Increasing the use of renewable heat is essential to meeting legally binding carbon targets.

“The Chancellor also announced changes to tax reliefs on investments in renewables, which are yet another cut in support for the sector and which lessen its attractiveness to investors.

“We did, however, see a positive development in research and development with the Department of Energy and Climate Change’s innovation programme doubling its investment to ensure it can develop low carbon and renewable energy technologies, including smart grids.”

Graeme Leach, chief economist, Institute of Directors

“The reforms to energy subsidies, prioritising riskier offshore wind, are a positive step forward in the development of the renewable energy industry. We welcome this signal from government that onshore wind and solar are growing into mature industries that are no longer reliant on subsidies. To be sustainable in the long-term all technologies must be able to stand on their own two feet, and this includes renewables.”

Gareth Stace, director of UK steel, EEF

“Moving to an exemption of energy intensive sectors from the costs of renewables is enormously welcome and demonstrates that government is dedicated to finding a long term solution to this problem. This is an extremely positive development. Ever since the Chancellor committed to a compensation package for the costs of renewables support at the 2014 Budget, there has been a significant element of uncertainty regarding its scope, adequacy and longevity.”