Extract from Analyst Reaction by Victoria Cuming, BNEF’s Head of European Policy
The Budget, presented on 16 March by Chancellor George Osborne, gave with one hand to clean energy and took away with the other. The government will hold Contract-for-Difference auctions by 2020 allocating up to GBP 730m of subsidies for offshore wind and other “less established” technologies. But onshore wind and PV developers remain in the dark about future support, as the Conservatives unveiled tax breaks for oil and gas, and backing for small modular reactors.
- The bright spot in the Budget for renewables was the announcement of auctions to support up to 4GW of ‘Pot 2’ projects, with the first round to be for GBP 290m. Energy secretary Amber Rudd suggested in November that the first auction would be held by end-2016.
- The 4GW capacity cap will mean that only a third of the estimated 12GW pipeline to 2026 could be supported, if offshore wind were to win all the subsidy allocated. Also, without specific detail on timing, it will be tough for the supply chain to plan ahead.