The Renewable Heat Incentive, offshore wind, clean coal and the Green Investment Bank received funding today, even as Chancellor George Osborne announced £81 billion in public spending cuts.
Chancellor George Osborne
announced during the final part of the Comprehensive Spending Review
(CSR) today, that the Government would maintain its commitment to being one of the "greenest governments ever" and fund green initiatives such the Green Investment Bank
(GIB), offshore wind
manufacturing, carbon capture and storage
(CCS) and the Renewable Heat Incentive
Science and the environment have still taken a hit, but it is less than some feared. The £4.6 billion budget is the same in cash terms, and will amount to a cut of less than 10 per cent over four years. From this budget, efficiency savings of £324 million will have to be found.
Osborne said the UK is a leader in scientific research and that is the key to future economic success, and therefore should lose as little funding as possible.
"Research and technological innovation
will help us with one of the greatest scientific challenges of our times - climate change - and it will support new jobs in low carbon industries," the Chancellor said.
Renewable Heat Incentive
Osborne announced funding for the RHI, which will incentivise homeowners and businesses to generate their own renewable heat, but this also
means a phasing out of the Warm Front programme. The Department of Energy and Climate Change (DECC) has confirmed that
the RHI will receive £860 million in funding and begin in June 2011.
The Renewable Energy Association (REA), which has been lobbying for the
incentive, said details on the subsidy are still needed, but cited
this as a big step for the UK.
"Today's announcement is a huge relief and a very big breakthrough,"
said Gaynor Hartnell, chief executive of REA. "Finally renewable heat
moves to the heart of UK energy policy
, exactly where it belongs.
"While the announcements today are tough in many areas there is a good
news story here to celebrate – the Coalition Government is putting its
money where its mouth is."
Green Investment Bank
The Government promised £1 billion to fund the Green Investment
Bank, which falls £1 billion short of the amount Greenpeace says is
necessary. The organisation climbed the Treasury yesterday, urging
ministers to go ahead with the bank.
Greenpeace expressed disappointment after the announcement today,
however, saying that the £1 billion fell short of the amount needed.
"A poorly financed fund is not a green bank," said John Sauven,
Greenpeace executive director. "It doesn't have the financial clout, or
the independence to do the job, and will end up as nothing more than an
"So if this Government wants to live up to its own billing as the
greenest ever, this bank must be independent and properly financed
Anything less will dash hopes of a new green economy for Britain, and
our chances of tackling climate change and energy security."
By using other sources to build on the £1 billion of direct funding,
the bank's capitalisation could reach the £4 to £6 billion that is
recommended by business leaders and independent analysis, said the
Aldersgate Group, a business coalition.
Deputy director for the organisation, Andrew Raingold, said the creation
of the GIB could boost economic growth. "We welcome the Chancellor's
announcement to put the Green Investment Bank at the centre of the
Government's plans to invest in the country's future," said Raingold.
"If the institution has a remit to issue bonds and leverage capital at
scale from the private sector, it can significantly reduce the massive
financing gaps for green technologies over the next decade, stimulating
growth and jobs."
Carbon Capture and Storage
Secretary for Energy and Climate Change, Chris Huhne, succeeded in securing £1 billion for carbon capture technology, although this was half the amount he had bid for.
"DECC is playing its part in tackling the deficit," said Huhne. "Like the rest of the public sector we have taken some tough decisions, but we remain on course to deliver on our promise to be the greenest government ever. We will help create green jobs and green growth – and secure the low carbon investment we need to keep the lights on."
The DECC suffered an annual
cut in budget of five per cent. DECC promises to reduce resource
spending by 18 per cent in real terms and increase capital spending by
41 per cent in real terms.
Trade association RenewableUK has backed the announcement today for £200 million to be invested in low carbon technologies including offshore wind, saying it appears that the £60 million fund to upgrade ports for offshore wind turbine manufacturing it has been lobbying for has been retained within it.
"Retaining the Ports Fund will give the industry a huge boost and establish the UK as a major force in renewable energy manufacturing," said Maria McCaffery, RenewableUK chief executive.
Impact for Defra
The Department of the Environment, Food and Rural Affairs (Defra) will have to make savings of an average eight per cent per year. Over the course of the Spending Review period, Defra will reduce resource spending by 29 per cent and capital spending by 34 per cent. The Department’s administration budget will also be reduced by 33 per cent.
"Our strategic aim is to deliver on the Prime Minister’s pledge that the Coalition will be the greenest Government ever, whilst playing our part in tackling the economic deficit that we have inherited," said Caroline Spelman, Environment Secretary.
"This settlement reflects the need to make significant savings alongside meeting the priorities we have set and maintaining important frontline services in respect of flood defences, environmental protection and animal health monitoring."
Despite fears over the future of green subsidy schemes in the spending
review, the Feed-in Tariff, which pays people and businesses for small
scale green electricity generation, is set to remain as it is until an
already planned review in two years.
Renewable energy supplier Good Energy said it was pleased that the immediate threat to Feed-in Tariffs (FiTs) has been avoided.
"These tariffs are essential in driving renewable energy generation
amongst consumers and businesses," said Juliet Davenport, chief
executive of Good Energy. "FiT has a vital role to play in reaching the
Government's commitment to achieving at least a third of energy
generation from renewable energy by 2020."
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