‘Missed opportunities’ on energy efficiency and cleantech: UK’s green economy reacts to mini-Budget

Image: HM Treasury. CC BY-NC-ND 2.0. https://www.flickr.com/photos/hmtreasury/52378507455/

Kwarteng addressed the House of Commons from 9.30am today (23 September) to deliver the Budget, alongside a Growth Plan. As expected, the focus was on cutting taxes and streamlining planning regulations in the hope that this would foster economic growth. New Prime Minister Liz Truss is a vocal believer in the theory of trickle-down economics.

You can read edie’s coverage of all the key inclusions in the Budget and Growth plan here, including the creation of new Investment Zones where business taxes and planning rules – including environmental rules – will be relaxed in a bid to encourage investment.

Here, we round up the green economy reaction to the announcement. While there is support for measures to fast-track offshore wind development, commentators are largely disappointed and have pointed to missed opportunities on other forms of clean energy, as well as energy efficiency.

EcoAct’s chief executive Stuart Lemmon said: 

“The Chancellor’s announcement today focused on growth and with planned rises to corporation tax scrapped, we urge businesses to invest sums saved from the tax break into net-zero delivery plans. Growth needs to be decoupled from carbon emissions, and so we’d suggest if the Chancellor wants to pursue a growth agenda, it should be green too. The lack of sustainable investment measured in today’s statement means the onus falls onto businesses to take the lead and keep ambitions of 1.5C alive.

“By 2023, financial institutions and listed companies in the UK will be required to publish their net-zero transition plans, however currently only 36% of the FTSE 100 has set a science-based target (SBT) for Scope 3 emissions reductions. These often represent the majority of an organization’s total greenhouse gas emissions. This announcement represents an opportunity for corporates to step up to the plate and demonstrate the leadership and best practices to enable transformative change across all sectors of the economy. Businesses that are proactive on net-zero will find themselves in a position of competitive advantage in the years to come and the certainty provided by this announcement should serve as a catalyst for ambitious action now.”

The Association for Decentralised Energy’s (ADE) energy efficiency policy manager Chris  Friedler said: 

“Today’s fiscal event provides an extra £1bn for energy efficiency over three years, in addition to a disappointing reiteration of £2.1bn already pledged. While the new funding is welcome, household bills are still significantly higher than before the gas crisis.

“Shorter-term bailouts that fail to reduce the amount of gas homes need to keep warm will lead to higher costs to the public purse overall. The Government must build upon this and look to more ambitious short-term funding for energy efficiency, as well as long-term targets and delivery mechanisms to prevent the gas crisis from affecting households again in the future.”

Friends of the Earth’s head of policy Mike Childs said:

“Almost two-thirds of the infrastructure priorities announced today as part of the Chancellor’s Growth Plan are road schemes, along with five North Sea oil and gas developments. Surely the Government can no longer pretend that its plans are consistent with the UK’s legal obligation to cut climate-changing carbon emissions?

“It’s good that there are a few offshore wind projects in the mix – though a relatively small number – but alongside these, there should have been a long list of onshore wind sites and solar farms because they are quick to build and an incredibly cheap source of energy.

“What’s also missing from the Growth Plan is any assessment of its climate impacts. Instead, it works as a blueprint for ripping up important environmental safeguards and pursuing economic growth at any cost, which is the last thing we need faced with a climate and ecological crisis that is already devastating the planet.”

Vattenfall’s country manager for the UK Danielle Lane said:

“It’s great that the Government’s taking steps to reform the offshore wind planning process which will accelerate the renewables projects, like the Norfolk Vanguard offshore wind farm, required to help keep bills down for customers while also breaking the UK’s reliance on expensive gas.”

The Association for Renewable Energy and Clean Technology’s (REA) director of policy Frank Gordon said:

“The REA notes today’s re-commitments to the Government’s previous energy package announcements, including moves to do more on energy efficiency through the Energy Company Obligation.

“Much of the innovation and growth promoted by this statement would be expedited if the Government passes the Energy Bill, which would open up opportunities for investment in areas such as energy efficiency, carbon capture, heat networks, hydrogen and further clean technologies – all of which would deliver sizable benefits to new investment zones.

“The REA reiterates its statement that renewables are the cheapest form of generation and best route to delivering energy security, providing long-term relief from the ongoing energy crisis.”

The Building Research Establishment’s chief executive Gillian Charlesworth said:

“We were disappointed to see that today’s mini-budget contained no measures to improve the energy efficiency of our homes and buildings. While the Government’s Energy Price Guarantee is a welcome intervention to protect vulnerable households this winter, there is no guarantee that the volatile global gas market will steady any time soon. We need long-term solutions to the energy price crisis which end our dependence on foreign supplies of fossil fuels, reduce overall energy demand, and support the drive to net-zero.

“Retrofitting our building stock is an immediate and cost-effective solution that can deliver this. Heat and energy use in our buildings makes up a quarter of the UK’s greenhouse gas emissions, and we are rapidly running out of time to address this if we are to meet our net zero obligations by 2050. Setting out a clear and credible plan to decarbonise our homes and buildings is an immediate step the Government can take to tackle the cost of living crisis, act on climate change and demonstrate global leadership.”

The Centre for Ageing Better’s chief executive Dr Carole Easton said:

“The energy price guarantee is a temporary sticking plaster that offers no permanent solution, simply delaying a future crisis for when the market intervention ends. In the breathing space that the government has created for itself, it is paramount that substantial action is taken to resolve one of the root causes of the problem – this country’s cold, draughty and unsafe homes.

“Now is the time for action and the rollout of a national retrofit programme to make homes warmer, safer and more energy efficient as part of a broader move to improve people’s homes. This should be supported by a network of ‘Good Home Agencies’ across the country to provide advice, access to finance and practical support.”

Ashden’s cities manager Cara Jenkinson said: “Shockingly, there is no mention of energy efficiency in this fiscal statement.

“This is a triple miss by the Chancellor – a missed opportunity to reduce our dependency on expensive gas, to create hundreds of thousands of jobs across the country and to cut our carbon emissions. It is a shame that the Chancellor has not targeted stamp duty reductions for those who make their homes more energy efficient.”

Caroline Lucas, Green Party MP for Brighton Pavilion, said:

“If the Chancellor were really on side of British people rather than fossil fuels giants, he’d scrap the ‘investment allowance’ subsidy, introduce a windfall tax worthy of its name, adopt a green retrofit revolution, and put a stop to fracking and new oil and gas licenses.

“But this was a climate-wrecking, action-delaying budget for the benefit of the Chancellor’s fossil fuel friends. In his morally bankrupt Britain, bankers can earn eye-watering bonuses whilst the poorest lose out most from tax measures, fracking companies are allowed to bribe local communities, and growing corporate profits at any cost is seen as virtuous – this is inequality economics, pure and simple.”

Positive Money’s executive director Fran Boait said:

“Rather than handouts for the richest, a much better use of borrowing would be public investment, especially in renewable energy and retrofits, which would help bring down bills and guarantee energy security.”

Simon Crookston, Partner at Crowe UK said:

“The Chancellor should have been bold and provided greater incentives for businesses to be innovative and invest. There are targeted reliefs for businesses in investment zones but for those businesses not in these zones there is limited additional support.

“It is a real shame that the Chancellor did not provide further additional incentives to encourage further investment in solar, wind, water turbines and other green initiatives, particularly in relation to renewable energy.  We need to radically change our approach in the current energy crisis and the Chancellor seems to have ignored this in his new approach for a new era.”

Green Alliance’s head of economy Sam Alvis said: 

“The Government wants to boost economic growth, but the tax cuts and the spending announced today aren’t being targeted at the greatest potential for productivity and GDP growth: green technology and clean energy.

“Making it easier to build railways, energy and associated infrastructure will be vital to delivering net-zero and growth. But if we use those reforms to deliver outdated tech like fracking, it will hold us back.”

Conservative Environment Network director Sam Hall said: 

“It was welcome to hear the Chancellor acknowledge the role that clean energy can play in boosting growth. His bold programme of tax cuts will help our world-leading green businesses invest more and grow.

“It is brilliant news that the Chancellor has listened to calls from the Conservative Environment Network for a significant expansion of insulation funding. We also warmly welcome changes to speed up planning for offshore wind farms, to lift the ban on English onshore wind farms, and to fund legacy renewables costs out of general taxation. Renewables and insulation will not only permanently lower bills and accelerate progress towards net zero, but strengthen our energy security and protect the UK from Vladimir Putin’s weaponisation of Russian gas reserves.

“As the Treasury-commissioned Dasgupta review into the economics of biodiversity showed, economic prosperity also requires a healthy natural environment, however. Outside the EU there is an opportunity to reform and simplify environmental regulations, but safeguards for nature must not be weakened.”

Jess Ralston, senior analyst at the energy and Climate Intelligence Unit (ECIU), said: “If prices stay high, the Government’s gas subsidy bill would be several times the investment needed to get all 28 million homes in Britain properly insulated. Boosting the ECO scheme could well end up being cost-neutral on Treasury with insulation cutting gas demand and so the overall price tag of the bailout.

“The ban on onshore wind – which around 8 in 10 people support – has been a major anomaly in British energy policy given it’s both cheap and popular with the public. So a decision to lift the ban suggests the new government has listened to the experts and understands building more British renewables reduces our reliance on costly gas and so brings down bills.”

Philippa Spence, Ramboll UK’s managing director, said:

“There was a shadow over the good news of the generous energy support packages announced by Kwarteng today for those concerned about the UK’s environment. The commitment to reform the planning process risks unwinding key environmental protections unless these are retained. The planning system does need reform, but not at the cost of our environment, already one of the most biodiversity depleted in Europe. The government must seek to achieve efficiency and environmental enhancement simultaneously.

“Kwasi Kwarteng promised to ‘unleash the power of the private sector’ and enable growth through a number of measures including tax cuts. To truly unleash the potential of industries supporting the green energy transition will also require clear policy signals that this is a long-term commitment, such as enabling onshore wind rather than resurrecting fracking. We have one of the best green energy opportunities globally and there is no doubt that with the right support, it will generate significant growth.”

IPPR’s associate director of energy, climate, housing and infrastructure, Luke Murphy, said:

“The Chancellor’s statement offered neither the policies, investment, or strategy to realise the huge opportunities to create prosperity that delivering net-zero and restoring nature offer.

“There were welcome albeit small steps on energy efficiency and depending on the detail, onshore wind, but in other areas, the government is going in the opposite direction. It is removing the moratorium on fracking, expediting licenses to drill for more climate destroying and expensive oil and gas, and proposing to rip up environmental protections.

“Instead of offering billions of pounds of tax cuts for the richest that will do little to increase long-term growth, the Government should have invested in projects to deliver the transition to a cleaner economy from home energy efficiency to clean transport.”

WWF UK’s executive director of advocacy and campaigns Kate Norgrove said:

“Today’s mini-budget doesn’t address the root cause of our energy bill crisis. Tax cuts alone won’t drive growth, nor will they address the root cause of skyrocketing bills: our dependence on outdated, polluting fossil fuels.  

“If the Government is serious about boosting the UK economy it needs to stop blowing hot and cold on tackling the climate and nature emergency. The only route to a growing and resilient economy is to invest in net-zero by scaling up renewables, insulating our homes and supercharging the shift to nature-friendly farming. Anything less would be a betrayal of people and the planet.” 

The Energy Saving Trust’s head of policy Stew Horne said: 

“Today’s Growth Plan is welcome confirmation of support for homes and businesses in the face of the worst energy crises in a generation. Yet there is still no plan to reduce energy demand that will in turn reduce gas imports and lower energy bills now and in the future.

“The surest way to improve energy security and bring down bills is to use less energy wherever we can. Alongside the supply-side measures the Government has announced, we need a much clearer strategy for demand-side measures, including crucially, energy efficiency. The extension of the ECO scheme and additional funds for the Public Sector Decarbonisation fund are welcome steps in the right direction, but more action is needed including outstanding Government manifesto commitments on energy efficiency.

“We have been calling, alongside industry, for a clear pathway to reduce household, business and public sector energy use and a concrete plan to ensure energy security and reduce reliance on gas imports. This should include a nationwide programme of retrofitting homes, supported by a comprehensive and impartial national energy advice service.

“In addition, the Government has made it clear that they wish to stimulate investment across Britain to spur growth. Investing in businesses, technologies and sectors that will deliver energy security and are net zero-aligned is the surest way to achieve sustainable and sustained growth across the UK, while driving down carbon emissions.  The prioritisation of electric vehicle charging schemes and the commitment to unlocking the potential of onshore wind in England are both a step forward. However, much more needs to be done to accelerate these programmes, including investment in energy storage.

“We call for these areas to be addressed. We can’t afford to miss another opportunity at such a crucial time.”

The Aldersgate Group’s head of policy Ana Musat said:

“The Chancellor’s announcements today contain some necessary measures to support households and businesses in the midst of the energy crisis. Longer-term measures to drive investment in renewables through support for quicker onshore wind development and a streamlined planning process are also welcome, and will ensure that we continue bringing cheap, domestic renewables online as quickly as possible. Research has shown that this is essential for achieving a low-cost, secure energy supply: in 2021, renewable generation helped the UK avoid importing more LNG, which would have cost £30bn at current prices and would have made us more dependent on imports.

“The focus on economic growth, job creation and attracting investment has been the cornerstone of today’s Budget announcements. While tax cuts in certain areas do hold the potential to free up capital that can drive much-needed investment, they must be accompanied by appropriate regulation and support for infrastructure delivery to direct capital towards high-productivity sectors, such as hydrogen production, low carbon manufacturing and renewable generation.

“The right combination of incentives and regulation will deliver a level playing field and ensure that businesses investing in low carbon solutions are not simply undercut on price. Smart regulation, tax incentives and support for infrastructure development can ensure that the UK leads the world in low carbon investment, which offers a chance to grow the economy, create jobs across the country and boost exports in the long term. This has already been shown to be the case regarding offshore wind and hydrogen.”

UK100’s membership director Christopher Hammond said:

“Britain is paying the price of successive Governments kicking the can down the road and not making our homes fit for the future. The cheapest energy is the energy we don’t use, but this has been overlooked time and again. Today’s Growth Plan contains some welcome measures for net-zero, but seems that the dash for gas takes precedence.

“To avoid another winter like this one, where millions are expected to fall into fuel poverty, we need a locally-led energy efficiency revolution. Looking at the headline figures, £3bn for boosting energy efficiency is promising, but it’s unclear if this is new money — and not just repackaged promises.

“We’re calling for a national drive on energy efficiency to permanently reduce household bills and accelerate progress on net-zero. It might not be an earth-shaking proposal. But as the Government is quickly learning, people don’t want the ground to shake, they just want to be able to afford to pay their bills.”