The Chancellor’s Spring Budget and the energy sector

Widely trailed before the Chancellor took to the dispatch box, was that the £2,500 energy price cap which was due to expire next month would be extended for a further three months. This has been confirmed, but the £400 winter discount that all households have been receiving is coming to an end in April.

The extended freeze on the energy price cap is welcome news for households up and down the country who continue to struggle with the soaring costs of energy.

With the turmoil in international energy markets likely to continue for some time, its increasingly important that other ways of driving down the cost of energy are pursued with greater urgency. This includes getting a firm grip on energy efficiency policy; an area in which successive governments have failed.

Several schemes in this area simply haven’t been economically viable for homeowners and landlords. The investment and planning that is required in terms of workforce skills for delivering energy efficiency measures also hasn’t transpired.

We had hoped in today’s Budget to see more spending commitments in this area and whilst there was some funding announced for businesses (with the extension of the Climate Change Agreement Scheme), there was no mention of additional investment for domestic energy efficiency.

Targeted investment and intervention on jobs and skills to make sure that much needed energy efficiency measures can be rolled out at scale to households is urgently required.

IEMA is pleased to be participating in the government’s Green Jobs Delivery Group, which has been set up to support the creation of 480,000 skilled well-paid green jobs by 2030. This includes jobs that will be targeted towards insulating British homes and buildings.

But investment remains paramount.

At a more strategic level greater investment is needed in cleaner infrastructure to help deliver the net zero transition. Only last week did the Committee on Climate Change warn that without more we are on track to miss the 2035 net zero electricity target.

To this end there were announcements on increasing nuclear capacity, with the Chancellor setting out plans to consult on categorising nuclear power as environmentally sustainable. This would mean that nuclear would gain access to the same investment incentives that renewable energy technologies enjoy.

The launch of Great British Nuclear, that the Chancellor insisted could provide a quarter of our power needs by 2050, was also included in the Budget as were details of a demonstration competition for small modular reactors, which if proved viable will be co-funded by government.

However, more concerted, and joined-up investment streams for energy continue to be required if we are to achieve our net zero goals. We expect further detail in this area with the government due to publish its recalibrated net zero strategy by the end of the month.

Ben Goodwin

Director of Policy and Public Affairs, IEMA, IEMA

Ben is Director of Policy and Public Affairs at IEMA. In this capacity he looks after the delivery of IEMAs core policy, practice and public affairs activities across a range of environmental and sustainability issues. Prior to joining the organisation Ben worked in several similar policy roles at organisations including the Institution of Civil Engineers and the Renewable Energy Association.