SPRING BUDGET: THE INDUSTRY RESPONDS TO THE CHANCELLOR’S BUDGET
Posted by: electime 16th March 2023
Paul Wrighton, Director of Sustainable Infrastructure at Johnson Controls said:
“The chancellor’s action on energy – especially the extension of the Climate Change Agreement scheme – sends a relatively positive message, however the lack of clear ringfenced funding for wider energy efficiency measures is disappointing, especially at a time when cost pressures for households and businesses are going nowhere fast. What was missing from the budget was a bold fresh programme promoting heat pump uptake and other energy efficiency opportunities – heat pumps especially are a no brainer for cost, efficiency and sustainability compared with old gas boilers.
“The current boiler upgrade scheme has a budget of £150m each year for three years and aims to issue 30,000 vouchers annually. But in the first eight months of operation, only 9,888 grants were awarded. There’s a huge opportunity to put tension on the matter with a real nationwide programme to accelerate the change.
What we need to see now is the government supporting businesses in getting the technical assistance they need directly or via industry partnerships so they can identify opportunities to reduce emissions and develop a plan to transition to net zero. This could include providing access to experts in energy efficiency, renewable energy, or other relevant fields. It’s also important for the government to facilitate knowledge sharing and best practices by creating networks or platforms for businesses to share information and ideas about how to reduce emissions.”
Robert Buckley, Head of Relationship Development at Cornwall Insight said:
“Once again, a UK budget has seen some significant energy policy announcements that will stir up conversation and opinion across the country. It also shows how reining in energy prices is seen as key to restraining inflation.
“The pre-budget announcement to maintain the Energy Price Guarantee at £2,5001 had already brought much-needed clarity to energy suppliers and no doubt relief for many households. The additional announcement that charges for prepayment meters will be aligned with comparable direct debit charges from 1 April 2024 will further help, and we wait to see more detail on the implementation.
“Many businesses, like households, are struggling with high energy bills, and today’s statement that Climate Change Agreements will be extended by two more years from 1 April 2025 and that swimming pools and community groups will be getting access to a relief pot will be welcome news to those eligible. However, many will be left disappointed that there were no adjustments to the less supportive Energy Bill Discount Scheme due to take effect from the start of next month. While households have general support for another three months, the expectation is clear that the vast majority of users will once again see their energy bills driven by the market from the summer.
“With government support for energy bills coming to an end, the government is seeking to stimulate more UK based energy production as a sustainable solution to the energy crisis. Today’s Budget promised £20bn to support carbon capture, utilisation and storage (CCUS), the establishment of Great British Nuclear and a commitment to competition for small modular reactors. We also saw nuclear energy reclassified as environmentally sustainable, signalling a desire for it to be included in the green taxonomy; this along with a refresh of the Control for Low Carbon Levies mechanism on energy policy costs, does feel like a step in the right direction towards a more sustainable UK energy market.
“These, and other new initiatives will add to an already congested policy agenda as a UK General Election looms over the horizon. The challenge will be in the implementation of these many ambitions.”
Akin Gump partner Matt Hardwick comments:
“Given the fundamental importance of the industry sector, it was surprising to see no pledge from the Chancellor to support the build out of battery manufacturing capacity in the UK. Without a clear strategy to build out electronic vehicle (EV) and energy storage battery manufacturing capacity, the UK risks its supply requirements being exported and with it the associated value, jobs and skills creation opportunity. In the context of EV batteries, it is also likely to herald the export of a significant part of our EV manufacturing capacity, given the desire by EV manufacturers to co-locate or integrate these two aspects of the EV value chain. We have to hope that the Government has left something in the tank, so to speak, and that we will see announcements for support in this critical area in weeks to come. “
