On Wednesday 30th October 2024, Rachel Reeves, the UK’s first female Chancellor and the first Labour Chancellor for 14 years, unveiled her Autumn Budget to a packed House of Commons.
Following weeks of speculation about tax increases and the minimum wage, the Budget included plenty to excite the Fleet Street tabloids but little to energise the community energy sector.
Good news from the Budget
Supporting household energy costs
We were pleased to hear that the Household Support Fund, provided to Local Authorities to assist with day-to-day essentials for the most vulnerable in society, will be extended until at least the end of March 2025.
BHESCo have been able to use the Household Support Fund to access small grant payments for those experiencing energy debts and to purchase items such as dehumidifiers, thick curtains, and electric blankets which will reduce long term energy costs.
Another highlight of the Autumn Budget was the announcement of £3.4 billion of funding for the Warm Homes Plan, which aims to improve the energy efficiency of 350,000 properties.
Whilst this is a good indication of the new Government’s willingness to tackle the problem of the UK’s aging housing stock, the amount involved does not come close to addressing the scale of the issue, when we consider there are 18 million homes across the country with an Energy Performance Certificate (EPC) of D or lower.
£100 billion for GB Energy
A key pillar of the Labour Government’s dedication to tackling climate change is the creation of GB Energy, a national investment vehicle to support the development of clean energy.
Rachel Reeves committed £100 billion to GB Energy over the next five years, but did not provide any further details about what the funds will be used for, who can access them, how much will be available, and what the process or timeframes will be.
Not so good news from the Budget
No mention of community energy
The 2024 Labour Manifesto acknowledged the importance of community energy in helping the UK reach it’s net zero targets and committed support for the sector. This included £400 million per year of low interest loans to community energy groups and £600 million per year of grants to Local Authorities.
Sadly, community energy was not mentioned at all in the Autumn Budget, although we remain hopeful that support for the sector will be included as part of funding for GB Energy.
Carbon Capture & Storage
We were frustrated to hear £21.7 billion of funding allocated to the development of Carbon Capture & Storage (CCS) projects, money which BHESCo feel could be better spent on proven, reliable solutions, not least of all planting trees!
The promise of technologies which can suck carbon out of the air and store it in the North Sea bed feels like a dangerous justification for the continued use of fossil fuels, at a time when we know we must be reducing the use of fossil fuels to avert major climate breakdown.
Green Hydrogen
Another ‘unicorn’ technology that received significant support in the budget was green hydrogen. £2 billion was announced for the delivery 11 green hydrogen projects around the country, said to be “amongst the first commercial projects in the world”.
Whilst BHESCo agree that green hydrogen could play an important role in the decarbonisation of industrial processes such as steel manufacture, we do not believe that it will ever be suitable for use in heating or transport. Reasons include its high production costs, its high water and energy demands, and the fact that it is more combustible than the gas used in our network today.
Like CCS, this money could be better spent on affordable, trustworthy solutions such as wind and solar power.
The 2024 Autumn Budget - Our final thoughts...
The establishment of GB Energy and a commitment to allocate £100 billion of funding towards clean energy investments is a clear and welcome change of direction compared to the previous government, and we look forward to reviewing the details when they become available.
Similarly, the Warm Homes Plan indicates a willingness on behalf of the Labour Government to acknowledge the UK’s inadequate housing stock and to take action on insulating our homes.
However, we see tremendous amounts of money allocated to emerging technologies which may deliver little value in the drive towards decarbonisation and could waste precious time and resources.
Furthermore, the absence of any mention of community energy was a disappointment, as was the continued support for a new nuclear development at Sizewell C in Suffolk.
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