A renewable outlook
At the start of July I still believed there are only two things in life that are certain - death and taxes. However, following the Chancellor’s summer budget announcement regarding the Climate Change Levy on 8 July it appears that we can’t even rely on taxes anymore (or more accurately, the exemption from taxes).
Since the general election the outlook for renewable electricity generation (and the low carbon agenda in general) has looked a little less bright. With the early closure of onshore wind under the Renewable Obligation, speculation about overspend in the Levy Control Framework, abolition of the zero-carbon homes scheme as well as the above mentioned removal of the Climate Change Levy exemption for renewable generators. As with any step change in policy, there has been a significant impact which is only made worse when the implementation is rushed leaving little (if any) time for market participants to adapt. The impact is not limited to just renewable developers but also anyone looking to develop or finance energy projects in the UK.
Looking forward, December will be an important month with two events which will signpost the UK’s future commitments to climate change and renewable energy. The Paris Conference of Parties (COP) will aim to commit all nations to a new legally binding climate change target. The publication of the fifth carbon budget covering the period 2028-2032 sets out the UK’s pathway to reaching our target of reducing emissions by 80% by 2050. Decisions being made today will not only affect the short term energy landscape in the UK but will also have an impact on supply chains, project pipelines and investor confidence for many years to come.