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Other energy/carbon news from yesterday’s Comprehensive Spending Review: Renewable Heat Incentive, Feed-In Tariffs and Green Deal etc.

The Renewable Heat Incentive (RHI) will be introduced from 2011-12 (June 2011 expected).  This will be funded by government (£860 million) and not through a levy on gas/oil etc.

The efficiency of Feed-In Tariffs (FITs) will be improved at the next formal review, rebalancing them in favour of more cost effective carbon abatement technologies. 

Up to £1 billion will be invested in one of the world’s first commercial scale CCS demonstration projects at a power station.  This funding is provided from general public spending and so does not require the introduction of a levy on electricity supplies for CCS. 

The Government will decide whether to introduce such a levy or to fund future demonstrations from general public spending once work has been completed in Spring 2011 on the reform of the climate change levy to provide support to the carbon price.  The Government plans to publish this consultation in November.

Over £200 million will be invested in manufacturing facilities at port sites and technology innovation to support the development of offshore wind power and energy efficiency technology for buildings. 

DECC will develop innovative ways of working with the private sector, acting as an enabler rather than the default provider.

Households will be able to improve the energy efficiency of their house at no upfront cost, repaying through the savings they make on their energy bills, through a Green Deal.  Extra support to reduce energy bills and help improve heating and insulation will be provided by energy companies to combat fuel poverty.  This will allow the Warm Front public spending programme to be phased out over time, saving £345 million by 2013-14.

Indications are that the Green Deal will be extended to non-domestic consumers although, there was no specific mention of this in the announcement. 

A commitment to £1 billion of funding from DECC and additional significant proceeds from asset sales to capitalise a UK wide Green Investment Bank, subject to a final design which meets the tests of effectiveness, affordability, and transparency.  This will aim to provide financial interventions to unlock significant new private investment in green infrastructure projects, such as offshore wind farms.

The Government is still to review the role of bodies such as the Carbon Trust, Energy Saving Trust, the Coal Authority and the delivery arm of Ofgem. 

See also Funding & Incentives.

We will update this website as more information becomes available.