The UK Chancellor George Osborne’s long-awaited and much dreaded Spending Review will slash funding for Government’s promised Green Investment Bank to just £1 billion.
The Green Investment Bank had garnered cross-party support before the election earlier this year as an effective means of driving the development of low-carbon technologies.
Only yesterday, Secretary of State for Energy and Climate Change Chris Huhne reminded attendees at the European Future Energy Forum in London that the country needs an estimated £200 billion to rebuild its energy infrastructure by the end of the decade.
“Our job,” he said, “is to put in place the right policy framework: to secure investment, stimulate green growth, and manage the transition to a low-carbon economy.”
But today Osborne announced that the UK’s transition to a low-carbon economy will have to make do with £1 billion for a carbon capture and demonstration project and just £1 billion – plus additional funds from the sale of Government assets – for the Green Investment Bank.
On a slightly more positive note, £200 million is earmarked to support offshore wind technology and the development of the country’s ports to support the sector.
Another potential victim of the cuts, feed-in tariffs, also appear to have survived the cuts for the moment, as does the proposed Renewable Heat Incentive, which will be introduced from 2011-2012 with £860 million in funding.
It may only be a temporary reprieve, as the Review promises to refocus feed-in tariffs on the most cost-effective technologies – to save £40 million – but tariff levels will not be reduced until the first scheduled review in 2013.
The Department of Energy and Climate Change’s Warm Front scheme, which aims to provide energy efficiency assistance to the most in need, will see its budget reduced successively over coming years to £110 million in 2011/2012 and £100 million in 2012/2013, after which it will make way for the Green Deal.
“Like the rest of the public sector we have taken some tough decisions,” says Huhne, “but we remain on course to deliver on our promise to be the greenest government ever.”