British Budget boosts marine renewables

The proposals include a potential £525m of new money through a review of the support mechanism for offshore wind. The Chancellor also announced a new deal with the European Investment Bank to provide a package of up to £4 billion for investment in renewable infrastructure projects, as well as a one year across the board doubling of capital allowances from 20% to 40%.

Adam Bruce, chairman of the British Wind Energy Association (BWEA) said, ‘This package of measures deserves a welcome from our industry, and is in line with proposals that we have been working through with government. It addresses the short-term economic hurdles we faced due to the fall of the pound against the euro and the post-Lehman collapse in project finance.

‘It also restates the Government’s long term commitment to the renewable energy sector, and should enable us to unlock up to £10bn of private sector investment in wind and marine energy projects over the coming few years.’

The Budget proposes to review the support given to the offshore wind from Renewables Obligation Certificates by £525m. Electricity supply companies currently receive 1.5 ROCs for every megawatt hour (MWh) of energy they buy from offshore wind farms, which they can then sell on. Under the Chancellor’s plans this will rise to 2 ROCs for the financial year 2009-2010, and fall back to 1.75 ROCS in 2010-11.

Because of the collapse in bank lending wind schemes currently seeking finance face potential delays, particularly those being developed by independent power companies that have historically relied on project finance to bring wind farms into operation. Under the arrangement negotiated by the Chancellor, the European Investment Bank will make available up to £4 billion for UK renewable schemes which cannot find project finance.

The Budget also saw the announcement of £405 million in funding for other low carbon energy technologies, including wave and tidal devices, a sector where the UK is currently a world leader in research and development. The new funding will come via existing programmes such as the Environmental Transformation Fund to assist manufacturers to taking their projects from prototype to the commercial stage.

Alan Moore, the chair of the Government’s Renewables Advisory Board and outgoing hair of BWEA’s Marine Strategy Group said, ‘The £405M for low carbon technologies development and deployment is a very promising and much needed budget decision. The wave and tidal industry has been fighting for support over the past years and only through determined efforts has made steady progress and established the UK as the world leader in this field. With this boost we should see the UK speeding the progress towards exploiting our massive indigenous wave and tidal energy potential.’