The UK Government has revealed there will be £730million in new auctions for subsidies for up to 4GW (gigawatts) of offshore wind and other less established renewables.
Subsidies for offshore wind would be capped at £105 per megawatt hour (MWh), falling to £85 for schemes commissioned by 2026, making them cheaper than the £92.50/MWh payments for Hinkley Point, projected to begin operating in 2025.
The Carbon Reduction Commitment, described by Mr Osborne as a “tax”, which requires large organisations to pay for their carbon emissions, is being abolished, with the cut funded by increases to the Climate Change Levy paid by on energy.
Mr Osborne announced further tax cuts for the one of the UK’s “most important and valued industries” – the oil and gas industry which supports 375,000 jobs – halving the supplementary charge on oil and gas to 10% and “effectively“ abolishing petroleum revenue tax.
Mika Minio-Paluello, campaigner at anti-oil group Platform said: “This is year another handout for Big Oil. Osborne will be remembered as the Chancellor who kept the UK hooked on fossil fuels as the world moved on.”
Green Party MP Caroline Lucas said: “This climate-wrecking Budget shows that the Government’s talk of putting the next generation first is nothing short of sheer hypocrisy.
“If our Government was serious about creating a decent society for our children and grandchildren, then they would be pulling out all the stops to support British firms and business in the renewable energy sector and to keep fossil fuels in the ground.”
RenewableUK’s Deputy Chief Executive Maf Smith said:“We welcome the Chancellor’s announcement that funding will be available for future rounds of competitive auctions to support offshore wind farms. The budget is tight but we’re up for the challenge.
“We’re confident that today’s announcement will deliver 3.5 gigawatts of new offshore wind capacity between 2021 and 2025 – powering more than 3.5 million British homes.
“This budget shows that offshore wind will be cheaper than new nuclear power and competing with gas by 2025, making it even better value for money. The industry is playing its part continuing to drive down costs relentlessly – we released a report this week showing in detail how we’re ahead of what was predicted. Today’s announcement will increase confidence, attracting billions of pounds of investment in the UK’s supply chain. It’s long term commitments such as this which will keep the UK as the number one destination in the world for investors in this technology.”
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