George Osborne reiterated today the UK government’s “determination to be the greenest government ever”. But given what we already knew, most of the new information contained in Wednesday’s Budget seems to be set against that agenda.
Let’s take the measures one-by-one:
1) CCS support. We already knew that £1bn was pledged for round one. The new information in the Budget is that round two will be funded largely by the carbon floor price.
But as Mr Osborne himself admitted, this won’t be enough (at least at the level it has been set) on its own. Further money will be required from general taxation, which leaves second round CCS projects fighting alongside everything else for a rapidly diminishing pool of government spending.
Another day, another complaint about the carbon floor price. This controversial policy has united an unlikely alliance of green campaigners and heavy industry in opposition.
Greens don’t like it because it benefits the nuclear industry, while manufacturers are disgruntled about having to pay more for electricity.
But Greenpeace and WWF had a legitimate claim that government policy was incoherent – on the one hand promising no subsidies to nuclear power but at the same time implementing a policy that could indeed earn such generators billions of pounds. The EEF, which represents manufacturers, on the other hand, is criticising the energy department for doing exactly what it intends to do: push up the cost of energy.
As reported in the FT on Monday, green campaigners in the UK have stepped up their attack on the carbon floor price, calling it a “windfall” for the nuclear industry.
They first made this warning in the immediate aftermath of the electricity market reform announcement, but now Greenpeace and WWF have put some numbers to their arguments.
They say the move could benefit the nuclear industry by up to £3.4bn, which would effectively be a subsidy, and so breach the coalition agreement.
Two days ago, before Chris Huhne announced his package of measures to shake up the UK electricty market, a group of energy industry insiders and experts told Energy Source what they wanted to see from the reforms. Now that we know the details, and people have had time to figure out what they mean, the question remains, did they get what they wanted?
Chris Huhne, the UK energy secretary, will tomorrow announce the details and scope of the government’s consultation on electricity market reform (EMR). The bill will come before parliament in the spring, but tomorrow’s announcement is expected to give some indications of the direction of government thought on certain key issues.
Huhne will be answering your EMR-related questions on this blog next week – email email@example.com by Friday, December 17th to pose your question. Meanwhile, here is what the energy industry wants to see ahead of the tomorrow’s release: