Important developments following the Autumn Statement

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On the 25th November, George Osborne delivered the Autumn Statement whilst stating they were “dedicated to putting Britain’s security first”.  In amongst the plans there have been budget changes to the Department of Energy and Climate Change (DECC), Department of Food and Rural Affairs (DEFRA) and the Renewable Heat Incentive (RHI) scheme.  Mr Osborne proclaimed that “going green should not cost the Earth.”

DECC budget cut
Mr Osborne has confirmed rumours by announcing that DECC will have its budget cut by 22% by 2019/20.  This will be delivered through efficiencies and reducing the cost contracts.  However, the department’s innovation programme is to be doubled to £500m over the next five years, to support improved security supply.

DEFRA flood investment
DEFRA’s “day-to-day spending” will fall by 15%, Mr Osborne went on to announce, leading to the department’s administration cost to be cut by 26%.  However, DEFRA will have £2bn set aside to protect homes from flooding, whilst the department’s science estates and equipment will receive £130m capital investment by 2020.

Funding rise for RHI
It was announced that the RHI scheme will see its funding rise to £1.15bn by 2021.  However, this means that the funding will fall short by around £690m than what was originally forecast by the Office for Budget Responsibility.  The funding has been made: “to ensure that the UK continues to make progress towards its climate goals,” keeping in mind that the UK needs 20TWh more renewable heat by 2020, to meet the Government’s 12% target.

Energy intensive exemption from tariffs
The Government is to provide an exemption to energy-intensive industries (this includes the steel industry) from the policy costs of the Renewable Obligation and Feed-In Tariffs. The statement says this will ensure that those industries: “have long-term certainty and remain competitive.” According to Osborne this will add £5 onto projected household bills.

Nuclear investment rise
The Government pledged funding of at least £250m over the next five years for nuclear research and development.  This included a competition to identify the best small modular rector (SMR) design.  The ambition of the competition is to build the world’s first SMRs in the UK during 2020.

Incentives for community shale gas developments

10% of tax revenues from shale gas developments will be spent on local areas.  This aims to lessen objections from hosting local communities.

For more information, help or advice please contact Andrew Davison on 0191 211 7950 or email [email protected].