Further comment and analysis on the UK budget

The UK's 'green budget' has divided opinion among environmental industries and campaign groups. Below edie rounds up some of post-match analysis.

More budget coverage can be found by following this link and you can have your say on how the measures will affect you and what could have been done differently here or feel free to take part in our straw poll here.

Friends of the Earth Scotland say green measures were too few and far between.

Duncan McLaren, chief executive of FoE Scotland said: "There were some green shoots in this budget, but they were few and far between, dwarfed by the massive missed opportunities to put us on the path to a low carbon economy.

"The 2020 emissions target is lower than the science demands to play a fair role in preventing climate chaos. It's also too low to drive real green innovation."

On new money for energy efficiency, green technology and carbon capture, he said:

"The investments in energy efficiency and green technology, while welcome, remain tiny in comparison with those recommended by Lord Stern of up to £10 billion a year.

"The inclusion of support for more carbon capture and storage (CCS) demonstration projects is a tacit acknowledgement of the climate trashing nature of new unabated coal-fired power stations like those proposed at Kingsnorth or Hunterston, but unless this money drives rapid full-scale adoption of CCS, such new coal plants will remain a disaster.

McLaren also pointed to a serious contradiction for a so-called 'green budget:

"On the one hand to increase support for energy efficiency and carbon saving at home, and on the other to fund increased oil and gas exploitation in the north sea, adding to emissions elsewhere, demonstrates the failure of low-carbon thinking to penetrate throughout the Treasury.

He also commented on the measures to promote saving and investment:

"The Chancellor had a chance to stimulate new public saving to fund a green recovery by issuing Green Treasury Bonds hypothecated to fund renewable energy and public transport, but sadly he adopted unfocused and scattershot measures to promote saving and investment, regardless of its carbon intensity.

"He could also have followed leading European nations in creating a dedicated public infrastructure bank to drive forward such investments.

And on future tax rises he said:

"And finally, the Chancellor almost entirely missed one of the biggest opportunities of all.

"We all know taxes must rise in future years to recover from deficit spending today.

"With the exception of a small but welcome increase in fuel duties, the Chancellor has ignored the potential to raise green taxes rather than conventional taxes".

Robin Cohen, a partner in Deloitte's Economic Consulting Practice said: "We will need to understand the detail of what the Chancellor has proposed, however all help for this sector is very welcome and should have the most impact for marginal wind power projects.

"The current estimates of the costs of building offshore wind to meet the Government's renewable energy targets for 2020, are in the order of £70-90 billion.

"This expenditure needs to compete with other investment opportunities and in particular with available feed-in tariffs in other countries.

"The Government's proposals to provide additional support of £525m to early projects reaching financial close between now and 2011 is clearly significant in terms of countering some of the advantages of lower risk feed-in tariffs available elsewhere.

"The success of the offshore wind industry will depend on the recovery of the economy and in particular recovery of the carbon price and the willingness of investors to put up funding for these projects."
Philip Wolfe, director general of the Renewable Energy Association, said the budget had a 'green lining'.

He said: "We are glad the government has sought to respond to areas we identified as critical and these measures should help prevent contraction in the renewables industry."

Mr Wolfe pointed to the fact the budget contained measures the REA had called for.


Merlin Hyman, Regen SW chief executive, said the Government had done its 'best.'

He said: "The Government has done its best to make this a 'low-carbon' budget, and, if we're proactive here in the south west, our businesses could really reap the benefits.

It's encouraging to see the Government is putting its money where its mouth is and investing in green industries - industries that could help lead us out of recession."

The BWEA and its member organisations have responded favourably to the funding promised to help the wind sector.

Adam Bruce BWEA chairman said: "This package of measures deserves a welcome from our industry, and is in line with proposals that we have been working through with government.

"It addresses the short-term economic hurdles we faced due to the fall of the pound against the euro, and the post-Lehman collapse in project finance.

"It also restates the Government's long-term commitment to the renewable energy sector, and should enable us to unlock up to £10bn of private sector investment in wind and marine energy projects over the coming few years."

The Budget proposes to review the support given to the offshore wind from Renewables Obligation Certificates by £525m. Electricity supply companies currently receive 1.5 ROCs for every megawatt hour (MWh) of energy they buy from offshore wind farms, which they can then sell on.

Under the Chancellor's plans this will rise to 2 ROCs for the financial year 2009-2010, and fall back to 1.75 ROCS in 2010-11.

Because of the collapse in bank lending wind schemes currently seeking finance face potential delays, particularly those being developed by independent power companies that have historically relied on project finance to bring wind farms into operation.

Under the arrangement negotiated by the Chancellor the European Investment Bank will make available up to £4 billion for UK renewable schemes which cannot find project finance.

Richard Mardon, managing director of Your Energy Ltd, a leading UK independent onshore wind energy developer said: "The UK has 9GW of wind energy projects on and offshore with planning consent or in construction, as much as 5GW of which could be completed within the next 2-3 years.

"Sorting out funding issues at this stage is crucial if we are to make a decisive step towards reaching our 2020 targets on renewable energy."

Today also saw the announcement of £405 million in funding for other low carbon energy technologies, including wave and tidal devices - a sector where the UK is currently a world leader in research and development.

The new funding will come via existing programmes such as the Environmental Transformation Fund to assist manufacturers to taking their projects from prototype to the commercial stage.

Alan Moore, the chair of the Government's Renewables Advisory Board and outgoing Chair of BWEA's Marine Strategy Group said: "The £405M for low carbon technologies development and deployment is a very promising and much needed budget decision.

"The wave and tidal industry has been fighting for support over the past years and only through determined efforts has made steady progress and established the UK as the world leader in this field.

"With this boost we should see the UK speeding the progress towards exploiting our massive indigenous wave and tidal energy potential."
Philip Sellwood, chief executive of the Energy Saving Trust, made three points.

He said: "Firstly, the government's announcement on scrappage contradicts the carbon friendly announcements in the budget such as money for electric vehicles and the increase in fuel duty.

This policy will increase car purchase regardless of CO2 emissions and the government has missed a significant opportunity by spending public money to incentivise any car upgrade when they could have incentivised the lowest carbon emission cars.

"Secondly, we welcome this £100m funding for to improve insulation in social housing which will also help to build up the supply chain for other sectors. However this must go hand in hand with measures for private sector housing especially those in private rented accommodation.

"We need more policies to support investment in to making energy efficiency for home owners more affordable and easy to do.

"Thirdly, We also welcome the £100m package to build new homes with high energy efficient standards and the extra £405m for extra support for low carbon industries which will help kick start more energy efficient housing developments.

"However Government must then hold these builders accountable to build to a minimum of Code Level 3, enforced properly, and Government must stick to its long term commitment for even higher standard for all new builds."

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