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What does the Budget mean for renewable energy?

Posted by: Arman Sarwar 1 Apr 16  | Renewable Energy

With recent news on George Osborne’s budget teamed with the changes in the Climate Change Levy (CCL) and the cuts tax for oil and gas, what will this mean for the future ofenergy efficiency?

The Carbon Reduction Commitment (CRC) energy efficiency is a mandatory UK wide trading scheme which was introduced in April 2010, with target emissions from large public and private sector organisations. It is designed to drive emission reductions within the target sectors by incentivising the uptake of cost effective energy efficiency opportunities. The CCL supplies to the business and public sector. In August 2015 electricity suppliers will be able to continue to exempt Renewable Source Electricity (RSE) which is then generated and permitted to hold sufficient renewable levy exemption certificates (LECS) that relate to electricity they are using suppliers they make to eligible consumers.

The Budget

George Osborne confirmed a major reform of business carbon taxes and agreed the next round of funding that will be allocated to new renewable energy projects set out the UK Government's 2016 Budget.

  •          Carbon Reduction commitment abolished
  •          Revenue lost from CRC replaced by increase in Climate Change Levy
  •           Contracts for difference up to £730 Million
  •           At least £50 million for innovation in energy storage and demand side response
  •           £700 million increase in flood defence spending
  •           No mention of Levy Control Framework for mandatory carbon reporting or Paris deal

So what does the budget mean for legislation and why is it important?

Delivering his eighth Budget announcement to a lively House of Commons last week, Osborne provided some positive news on carbon reporting regulations. The next Contracts for Difference Legislations are important for several reasons, particularly being setting the standards which controls to govern the actions of people and groups within private and public sector. The importance of renewable energy is it contributes to solving global warming, helps reduce import dependency through energy diversification as well as contributing to create new industries and jobs.                                                                                                                                                 

What does this mean for renewable energy?

The market research firm Transparency states in its report on the global market for renewable energy that the market is driven mainly by the globally increasing demand for sustainable and renewable energy. The report has shown that the market will grow from a valuation of $470.10 billion in 2012 to $831.99 billion by 2019, developing at a positive 8.3% CAGR over the period.” The report segments the global renewable energy market based on the following criteria: energy type, end-user, and geography. 

As more information continues to unravel from the budget, we eagerly anticipate what’s next for the renewable energy world.

 

 

 

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