The Budget from an energy perspectiveThursday 22nd March 2012 There is not a huge amount in the Budget in relation to Energy matters. Some of the announcements in the Budget are not new measures, but are an update as to the progress made in delivering previously announced measures.
- A new strategy for gas generation is to be published in the Autumn of 2012. This is linked to the Chancellor's statement that gas is cheap and is more efficient carbon wise than coal.
- Continue to develop electricity market reforms. This seems to be mainly aimed at the administrative effectiveness of the Carbon Reduction Commitment and the costs it imposes. If efficiencies cannot be found, an alternative environmental tax will be introduced.
- Changes to the offshore oil and gas regime.
- Establishment of the Green Investment Bank which is to be operational in April 2012.
- £1 billion to support carbon capture and storage.
- Five new centres for offshore renewable engineering.
- CHP plants will not be liable to carbon price support rates on the fossil fuels used for heat generation.
- Electricity utilities will be able to allocate CHP LEC's until 31 March 2018.
- Confirmation of provisions in the 2011 Budget related to Climate Change Levy rates, the period of operation of Climate Change Agreements and the removal from 1 April 2013 of the CCL exemption for electricity supplied indirectly from CHP plants to business consumers.
- Confirmation that the climate change levy discount for Climate Change Agreement participants will be increased to 90% from April 2013 as part of the measures to protect energy intensive industries.