4. Reactions to the Budget...

Gordon Browns' Budget back in March created quite a stir- with some lamenting its limits. Caroline Lucas, Green MEP for SE England, commented: ‘Given that we’re facing a climate catastrophe, Brown is trying to put out a forest fire with a bucket of water’. But others were happier. David King, the government’s chief scientist, hailed the proposed new National Institute for Energy Technologies as ‘the biggest leap forward for energy research in the UK for the last 20 years’.
The partnership aims to raise £1bn of funds, and BP, Shell and EDF have already said they will be involved. The Treasury said it will tackle specific 10-year goals, ‘in relation to energy sources and technologies that reduce carbon emissions and contribute to the security of energy supply’. It said public money would be found to match private investment, up to a set limit. The new institute builds on the Energy Research Partnership, which was announced in last year’s budget and officially launched in January. Run by the DTI, the partnership is also intended to ‘identify approaches and technologies to accelerate carbon reduction while maintaining security of supply’. According to its website, its mission ‘is to work together towards shared goals and act as a sounding board for, and generator of, ideas’.
However the Independent (29/03) reported that ‘environmental campaigners are worried that the new arrangement might be a way to leverage more public funds into restarting the UK’s nuclear power programme’. It might also be asked, wasn’t all this just duplicating what the UK Energy Research Centre had been set up to do? (see the Lords’ query on this later)
Even when it came to the specific commitments to renewables in the Budget, there were problems. The £50m allocation to the Low Carbon Building Programme was widely welcomed but there were complaints about the delay in getting the money flowing, with some companies saying that they were facing major problems since consumers did not know when and if they could get grants to pay for installation of new systems. Moreover, even if it led to 30,000 buildings being converted, over several years, the Independent noted that this would be ‘less than 0.15% of the crumbling, energy-leaking British building stock’.
Jeremy Leggett, CEO of Solar Century, the PV company, told them that the UK’s competitors, in Japan, Germany and elsewhere, ‘have support programmes for solar PV measured in billions of pounds, not millions’. If, he said, you divide the money amongst the six technologies that the government defines as micro-generation (PV, wind, micro-hydro, solar thermal, biomass and heat pumps) ‘you come up with less than £5m per year per technology, and that does not include energy efficiency, or the gas micro-CHP that the DTI slipped into the supposedly renewables-only programme at the eleventh hour’.
He went on ‘By contrast, Japan has spent an average of £100m a year for 10 years in building its PV industry. California is investing $2.9bn over 10 years. Germany pays premium prices for solar electricity, guaranteed for 20 years, financed by a tiny levy on the rates of all consumers. These programmes have the kind of scale and continuity that attract private investors. In the UK, we have another drip feed, for a few years.’
There were also regional issues. The £50m boost for micro-power generation in homes only applies to England and Wales- Scotland sets it own policies in this area. Developments like this come under the £2.2m Scottish Householders & Community Renewables Initiative, which is funded by the Scottish Executive (see Groups). The scheme has been under review. According to the Sunday Herald (26/03), the review ‘could see funding for Scottish householders and community projects being cut. The fund has already once run out of money in this financial year, and was only saved by a £250,000 cash injection from the Executive.’ According to the Energy Savings Trust ‘that was because there had mostly been community groups accessing funding before, but lots of householders started taking up funding’. Shiona Baird MSP, Green speaker on energy, told the Scotsman (30/3): ‘that this scheme’s funds have run dry shows that public attitudes and awareness on renewables is way more advanced than ministers’ thinking.’ Fortunately however, it has now been decided to allocate £3m extra to the scheme.
*The Green Alliance said the Microgen strategy ‘overcomes some of the barriers’ but fails ‘to offer a vision’ for how it ‘fits into the bigger picture,’ of decentralising supply.

...and the Climate programme

The Climate Change programme also attracted a fair amount of criticism- it’s acceptance of less than the original 20% by 2010 carbon reduction target was widely seen as a retreat. So did some of things that weren’t there. The British Wind Energy Association commented ‘We had hoped this Climate Review would inject an additional boost to offshore wind to ensure it joined onshore as a major provider of new power and carbon savings to hit our 2010 targets. The Government’s failure to act in this review must be addressed in the forthcoming Energy Review. Without a vibrant offshore wind sector it is hard to see how the Government’s 2010 climate targets can be met and how our 20% renewable aspirations by 2020 can become a working reality.’
The Renewable Energy Association (REA) expressed disappointment at the relatively low commitment to new renewables and was a little lukewarm on the microgeneration strategy which was touched on in both the Budget and the Climate Review and then published in full. Seb Berry, Head of Micro-Renewables at the REA said, ‘There are some good ideas here, but far more needs to be done for micro-renewables through the Energy Review. We remain concerned about the Low Carbon Buildings Programme. The sum set aside for householder grants remains too small, and we have advised it will not meet householder demand. Some of the additional £50m needs to be funnelled towards smaller projects, or the installer base built up during the previous programmes will be threatened and householders disappointed. The rest of the document makes numerous commitments for reviews and further study. We will be pressing hard for these high level commitments to be turned into tangible policy measures for delivery.’
However the REA seemed happier with the promise of a subsidy for biomass heat. The Government had said it ‘will introduce a support scheme for biomass heat in the industrial, commercial and community sectors. The scheme will run for five years and will be worth at least £10-15m in England over the next two years... In developing the scheme, account will be taken of the recommendations of the Biomass Taskforce on how the support can best be delivered.’

* On biomass generally, there were also proposals in the Programme for ‘considering the case under the new EU Rural Development Regulation for providing support for land managers to establish energy crops and develop biomass and woodfuel supply chains’ and ‘launching a further round of the Bioenergy Infrastructure Scheme in 2006-07 to help further the development of biomass supply chains’, plus ‘taking forward the Non-Food Crops Strategy to substitute renewable products for those based on fossil fuels’.
The REA also noted that two new measures will be introduced on CHP- consideration in phase 2 of the EUETS and allowing good quality CHP EfW to qualify for ROCs.  But the idea of a CHP obligation, exempting CHP from the RO supply base, and a £10m expansion of the Community Energy Programme, were all rejected, in favour of ‘taking forward support for biomass community heating through the new heat support scheme, which will include CHP’.