Did the Spring 2024 budget miss the mark for renewable energy projects?                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

This week, UK chancellor Jeremy Hunt delivered the Spring 2024 budget which, for many experts in the renewable energy sector, ‘missed the mark’; public opinion is already turning against the budget as simply not enough, especially where offshore wind projects are concerned. So, what was [or wasn’t!] pledged in the Spring Budget that has seemingly disappointed so many renewable professionals?

Firstly, Hunt pledged a year long extension to the Windfall Tax on gas and oil companies which, of course, will be very much celebrated by the renewable energy sector. However, alongside this, there seems to have been no mention of a commitment to spending the money raised by this tax on new renewable investments.

What’s more, there were no new policies introduced to support the rollout of low-carbon technologies, such as electric vehicles or heat pumps.

Hunt did, however, reportedly quadruple the budget for the sixth auction (AR6) round for new renewable energy projects, a pot worth just over £1 billion, where £800 million is allocated to offshore wind. This, the documents suggest, is the largest ever budget. But many renewable energy experts are already speaking out against this, suggesting that it’s simply not enough to achieve the UK’s offshore wind target, particularly if we’re to successfully achieve Net Zero by 2030.

This is because, last year, the UK fell drastically behind its target to build 50GWs of offshore wind when an auction round didn’t manage to attract any bids - meaning that offshore wind projects are starting the year on the backfoot, just 6 years before the Net Zero deadline.

As such, although £800 million is 4x the amount offered last year, renewable experts state it would only pay for around 3 - 5GW of new offshore wind projects, especially as recent inflation and competition in other markets have driven up costs.

With this, we must also question the seeming lack of support for other renewable energy projects - especially those that are proven to be fairly high yield such as Energy from Waste projects, CCUS technologies, anaerobic digestion projects and even green hydrogen projects which, only a few years ago, where the absolute talk of the town and extremely popular with investors! In fact, where are the green policies?

All-in-all, the Spring Budget for 2024 seems to have disappointed many; providing what experts deem to be a lack of support for renewable energy and low-carbon projects and, the support that has been pledged, is already being viewed as insufficient.