2024 Spring Budget: UK Invests £1 Billion in Clean Energy

On 6 March, the UK government announced that it had earmarked £1 billion for renewable energy initiatives within the 2024 Spring Budget, with the intent to bolster the country’s clean energy sector.  

Unprecedented Support for Renewable Energy 

A significant portion of the budget, £800 million, is being dedicated to offshore wind projects, marking a fourfold increase from the previous allocation round.  

This decision highlights offshore wind’s pivotal role in the UK’s renewable energy strategy and aligns with the ambitious goal to deliver up to 50 GW of offshore wind capacity by 2030, including up to 5 GW from floating offshore wind technologies.  

By leveraging their potential to generate substantial amounts of clean electricity, this considerable investment aims to accelerate the development of offshore wind farms and contribute to the UK’s net-zero emissions target. 

The Role of Contracts for Difference  

Pivotal to this budgetary focus is The Contracts for Difference (CfD) scheme, which ensures that renewable energy projects receive a guaranteed price for the electricity they produce. This mechanism has been instrumental in increasing the UK’s renewable electricity generation from 7% in 2010 to over 40% at the time of writing, underscoring the CfD scheme’s effectiveness in attracting investment and driving growth in the renewable sector. 

Expanding the Green Industries Growth Accelerator 

Additionally, the government is increasing the Green Industries Growth Accelerator (GIGA) funding by £120 million, elevating the total amount to over £1 billion. The aim here is to invigorate advanced manufacturing within the clean energy supply chain, supporting green industries and facilitating their expansion. 

Mixed Reactions from the Clean Energy Sector 

Despite these substantial allocations, reactions within the clean energy sector have been mixed.  

Critics argue the budget falls short in supporting solar power and fails to address critical skills shortages in the workforce, which could impede the growth of the UK’s cheapest electricity source.  

Concerns have also been raised regarding the adequacy of support for technological innovation and research and development (R&D), with calls for a comprehensive strategy to enhance collaboration between businesses, educational institutions, and the government. 

Furthermore, the additional £120 million allocated for the GIGA is perceived by some as insufficient, particularly when considering the costs associated with expanding the UK’s renewable energy capacity and infrastructure, such as wind turbines and electric vehicle (EV) charging stations. 

Investing in Nuclear Energy 

However, a notable highlight of the Spring Budget is the £160 million investment for the acquisition of two nuclear sites, Wylfa in North Wales and Oldbury in South Gloucestershire, aimed at revitalising the UK’s nuclear energy capacity.  

This move is seen as a crucial step towards harnessing nuclear power to bolster the nation’s energy security, with the potential to create thousands of jobs and provide clean, reliable power for decades. 

Moreover, the government has announced further development of small modular reactor (SMR) technology, with six firms shortlisted for support, signalling an innovative approach to nuclear power that could play a pivotal role in the UK’s energy mix. 

Policy Extensions and Electricity Grid Reforms 

Finally, the Energy Profits Levy is being extended until March 2029, in response to persistently high gas prices. Electricity grid reforms are set to introduce a new connections process and establish the National Energy System Operator in 2024. 

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