Energy trade associations urge ministers to adapt capital allowances and financial incentives to boost clean energy investment. Five leading energy trade associations recently warned that green development is facing critical risk unless the government focuses on vital measures within the Spring Budget.
In a letter to Chancellor Jeremy Hunt, the executives of RenewableUK, EnergyUK, Scottish Renewables, Solar Energy UK, and the Nuclear Industry Association explained that despite the industry commitment to low-carbon energy development, there are concerns that there are no credible plans to deliver green economic growth and drive further clean energy investment into the UK.
The trade associations are urging for clear steps in the Spring Budget to tackle clean energy development, including reform of capital allowances and specific financial incentives for investment in low-carbon energy in response to the recent developments in the US, including the £176 billion Inflation Reduction Act and the European REPowerEU package.
The letter explains that many clean energy projects have hindered final investment decisions and supply chain businesses impacted by the energy crisis and inflation pressures. A positive step such as improved capital allowances in the Spring Budget will encourage more investors than promises of a plan for economic growth.
A representative from the HM Treasury explained that the government is taking further action to drive investment in renewable energy generation, including a £30 billion commitment to supporting domestic green industrial development from 2021 to 2028. The HM Treasury explained that the Contracts for Difference scheme has successfully encouraged renewable energy development, with the latest auction generating a record capacity of nearly 11GW of clean energy. To date, CfD generators have secured about £6 billion in price within the scheme.