Wednesday 8 July 2015

Climate Change Levy exemption ‘will save several hundred millions’

The most important element of the budget is the removal of the Climate Change Levy (CCL) exemption for renewable electricity.

That’s according to Renewable Energy Foundation Director John Constable.

His comment follows Chancellor George Osborne's Summer Budget announcement earlier today.

Mr Constable told ELN it will benefit the Treasury by “several hundred million pounds a year" by reducing subsidies to green electricity generators.

He added: "The net impact on consumers will be zero – I mean they won’t see any change either way.

“The markets will be slightly less distorted, which is a good thing. Overall I think it’s a positive move."

He went on: "Subsidies for renewable generation are too high – they should be reduced. I would like to see consumers benefit, I think it’s a pity the net effect is simply irrelevant to them. But basically, a good thing to have done.”

[caption id="attachment_101032" align="alignright" width="350"] Image: Thinkstock[/caption]

However, RenewableUK’s Director of Policy, Dr Gordon Edge, said it was "a punitive measure for the clean energy sector".

He added: "Until now, Levy Exemption Certificates (LECs) generated as a result of the CCL have provided vital financial support for renewable energy producers.

“We’re suddenly looking at a substantial amount of lost income for clean energy companies which was totally unexpected. For example, Levy Exemption Certificates account for just over 6% of onshore wind generators’ revenues.

“Yet again the Government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this Government’s unfair, illogical and obsessive attacks on renewables."

WWF-UK CEO David Nussbaum went on to say: “If George Osborne pulls the rug out from under the entrepreneurs who are developing long-term solutions to the country’s energy challenges, he will exhibit a spectacular failure of vision."

The Chancellor also confirmed reductions in tax on North Sea oil and gas, which were initially announced in March.

Friends of the Earth senior economics campaigner David Powell said: “Mr Osborne’s confirmation of huge tax breaks to North Sea gas and oil and continuing support for deeply unpopular fracking is particularly reckless as the world prepares for critical climate talks this December.”