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Renewables industry attacks carbon floor price freeze

The Renewable Energy Association has condemned chancellor George Osborne for freezing the carbon price floor in his Budget.

It said this risked undermining interest renewables by creating uncertainty for investors.

Chancellor George Osborne told Parliament he would invest in nuclear power, renewables and shale gas to promote energy efficiency, but capped carbon price support rate at £18 per tonne of CO2 from 2016-17 for the rest of the decade.

He said this could be done “without any reduction in the investment in renewable energy”.

But the REA said this move was inconsistent with industry analysis, and called on Osborne to explain how investment in renewables could be protected during this freeze.

Chief executive Nina Skorupska said there was “much more in this Budget to please fossil fuel companies than the green economy”.

She added: “By freezing the carbon price floor, the chancellor is rowing back on his own policy and once again moving the goalposts for investors in green energy.

“Government must explain in black and white how investment in renewables is protected from the freeze, or risk undermining the investment required to replace ageing coal power stations with technologies that can keep the lights on without damaging the climate.”

The Budget also saw the release of a finance update to the National Infrastructure Plan, which sets out investment opportunities in infrastructure of all kinds, including renewables.

This was a response to demand from investors for greater clarity and transparency about the investment opportunities available, the Treasury said.

It said there would be £3.2bn of investment opportunities in ‘other large-scale renewables’ projects, in particular including large scale solar power, and £10bn for small scale renewables.

These though were expected to be individually too small to attract project finance from major investors.

Some £900m worth of biomass projects are expect by 2020, which the Treasury said “may represent a potential project finance opportunity”.


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