Is nuclear and fracking the future for UK Energy?

In his autumn statement George Osborne announced that ‘there is no more important infrastructure than energy’ with a pledge to double spending on energy research and support for low carbon electricity and renewable energy.

George Osborne

This seemed a promising statement for businesses and individuals supporting renewable energy in the UK. However Osborne also proclaimed that “Going green should not cost the earth” confirming his plans to cut budgets within DEFRA and DECC as well as planned reforms to the RHI (Renewable Heat Incentive). The overall intention of these department cuts is to deliver a budget surplus by 2020.

After the statement there were mixed reviews on what this means for the future of UK energy, particularly within the renewable energy sector.

Within the DECC budget reduction of 22% over the next four years. However the department innovation programme is forecast to receive double in budget to strengthen its industrial and research capabilities.  DEFRA also received a reduction in daily spend and general administration costs but will also have £2bn set aside to protect 300000 homes from flooding and £130m of this set aside to go towards equipment and science estates by 2020.

The RHI will see its funding rise to £1.15Bn in 2021 to ensure that the UK makes progress towards its climate goals. However this funding rise effectively means spending on the RHI scheme will be around £690M lower than the original forecast by the OBR (Office for Budget Responsibility). The reduction in forecasted budget will not make it an easy task to achieve our 2020 targets.

The statement also announced exemptions for energy-intensive industries, including steel, from the costs of Renewables Obligations and feed-in tariffs to ensure the long term certainty of these industries. The document also included information on changes to renewable obligations and feed in tariff schemes which are soon to be published.

A member from the solar trade association said “"If the Government proceeds with its proposed changes regarding the Feed-in Tariff and the Renewables Obligation, the extreme cuts to tariffs and maximum deployment caps planned for solar PV will damage the economics of business investment in solar.” (Source

Is Nuclear and Fracking the future for UK?

Osborne also reiterated his support for nuclear energy with a pledge of £250M investment into nuclear research development over the next 5 years.  Osborne wants the programme to revive the UK’s expertise in nuclear energy and place the UK as a leader within the nuclear industry.

Fracking Industry

There was further confirmed support of the controversial shale industry with the introduction of the Shale Wealth Fund which will see 10% of tax revenues from shale gas spent in local areas which experts say could be a potential value of £1Bn.

This announcement will no doubt spur numerous debates regarding the fracking industry in the UK. The policy director of Greenpeace highlighted yesterday that overall support for the fracking industry is at an all-time low and suggested  that the shale wealth fund was an attempt to convince the British public and boost overall support for this industry.

Despite some proposed improvements and an underlying recognition of the importance of renewables and low carbon technology many ‘green’ businesses have been left with little confidence surrounding future renewable energy investments and the overall goal of building a low carbon future.


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