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Follow up to the Budget

28th March 2011 Posted by

Like many of us, I awaited what George Osborne was going to reveal in the 2011 Budget, hoping for creativity in the development of more sustainable energy and environmental solutions for the UK.

The rhetoric was strong with Osborne announcing the Government’s intention to become a world leader in green energy and a clear intention to try to stimulate growth and jobs.

So far so good I thought. Energy as we all appreciate is a sector of national strategic importance and an area where the Government should have a clear long-term strategy. This is to prevent what I call the ‘Generation Gap’ in 2015, when 20 per cent of the production capacity of the UK in the form of old coal fired and nuclear power stations is destined to be closed to meet EU climate change legislation.

In the eyes of the energy sector, the Government’s answer is to create a stick rather than a carrot, setting a carbon price instrument in the hope that taxation will push the power companies to invest in newer, cleaner technologies. The reaction from the power companies has been to question the timing of this initiative, as perhaps it is better, with the prospect of a serious energy shortfall in 2015, to get this new power infrastructure on the ground first before extracting tax. Would a better solution have been to give capital relief to those investing in this new technology?

On the other hand, taxing fossil carbon emissions should spur lower-carbon technologies to step into the breech. At the very least, this would help to bridge the gap that will open up until such time as established energy production systems are able to be replaced with cleaner technologies capable of delivering base-load power at scale. Energy-from-waste is an obvious candidate technology that can be deployed immediately to help prevent an energy deficit, a fact not acknowledged by Government in its energy strategy.

The Green Bank featured heavily again as the Government promised more funds. While I applaud this sentiment I am beginning to worry about the silence that surrounds the issue of whether the waste sector is to be eligible for development funds, despite that energy-from-waste meets all of the Department of Energy and Climate Change’s key objectives.

Lastly, following dialogue with industry the Government has started to link growth inertia with the restrictive planning processes in the UK. Is Vince Cable’s comment that the new enterprise zones with their more proactive approach to planning code for the fact that the Government is now seeing Localism, their flagship initiative, impacting negatively on the ability for the private sector to pick up the slack caused by the spending restrictions imposed on local government?

My hope is that soon politicians will grasp the potential of our sector to not only provide energy, investment and local jobs but also a more sustainable future.

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