UK Budget – Energy Policy and CRC Update

Updates from today’s budget relating to UK Energy Policy and CRC;

“I also want to see investment in our world-leading energy sector, including renewables.

We’ve launched the Green Investment Bank, open for business next month.

We’ve introduced a Carbon Price Floor into our tax system to encourage investment and set the rate today. Combined Heat and Power plants will not be liable to carbon price support rates on fuels used for heat.

Renewable energy will play a crucial part in Britain’s energy mix – but I will always be alert to the costs we are asking families and businesses to bear.

Environmental sustainability has to be fiscally sustainable too.

The Carbon Reduction Commitment was established by the previous Government. It is cumbersome, bureaucratic and imposes unnecessary cost on business. So we will seek major savings in the administrative cost of the Commitment for business. If those cannot be found, I will bring forward proposals this autumn to replace the revenues with an alternative environmental tax.

Gas is cheap, has much less carbon than coal and will be the largest single source of our electricity in the coming years, and so the Energy Secretary will set out our new gas generation strategy in the autumn to secure investment.  I also want to that ensure we extract the greatest possible amount of oil and gas from our reserves in the North Sea. We are today introducing a major package of tax changes to achieve this.

We will end the uncertainty over decommissioning tax relief that has hung over the industry for years by entering into a contractual approach.
We are also introducing new allowances including a £3 billion new field allowance for large and deep fields to open up West of Shetland, the last area of the basin left to be developed,  a huge boost for investment in the North Sea”