Community Energy England Response to 2020 Budget

A budget intended to ‘unleash the energy, inventiveness and creativity of all the British people’ does nothing for Community Energy.

– Duncan Law, Policy and Advocacy Manager, Community Energy England:

“This Budget could have been far more ambitious in its scope to create a better, cleaner and more equitable energy system creating more resilience in the UK energy network. Instead we see a stubborn commitment to old centralised solutions. We call on government to look again at alternative opportunities and consider the benefits more support for renewable, locally generated energy can bring to the country.

Among giveaways and the occasional claw-back, for instance of Entrepreneurs Relief, there was very little for the enterprising and dedicated people who have been pioneering the future of energy in their local communities. The Committee on Climate Change says that the transition to net zero will be impossible without the consent and participation of people and communities. Community energy is key to this engagement.Since the removal of virtually all government support – the Feed-in and Export Tariffs, tax reliefs, increased business rates, hiked VAT – community energy has struggled to make a business case to stay active.

We had hoped for the reinstatement of Social Investment Tax Relief for community energy, business rate concessions in recognition of the important social benefits, a pledge to reverse the hike in VAT from 5% to 20% for Energy Saving Measures, with an ambition to reduce it to zero and announcements of the details of funding for energy efficiency upgrades to housing.The much vaunted ‘green budget’ did not materialise with vast new funding for roads dwarfing spending on green transport, road fuel levy frozen and nothing on energy efficiency in buildings.

The main investment in ‘increasing the UK’s use of clean energy’ is ‘a Carbon Capture and Storage (CCS) Infrastructure Fund’ of £800m to enable the continued use of fossil fuels. The Chancellor also pledged £900m split between R&D on nuclear fusion, space and electric vehicles. But by contrast the government has only extended the Renewable Heat Incentive (RHI) by one year.

There were some positive commitments, with £270m pledged to a new Green Heat Network Fund to run between 2022 and 2025, which takes total government support for heat networks to over £500bn, an ambitious action plan on tree planting and the development of ultra-low emission vehicles and infrastructure to support electric vehicles.

It’s worth noting that there is currently no government strategy to engage the public in the transition to a low-carbon economy. This will need to change. People should understand why and what changes are needed, see a benefit from making low-carbon choices and have access to the information and resources required to make the change happen.

Ministers, networks, regulators all agree that ‘The future of energy is local’. As a trusted, knowledgeable and highly motivated local intermediary community energy is uniquely well placed to advocate for and deliver the necessary engagement and changes at a local level whilst delivering high return on investment and legion community benefits. Community energy is an essential powerhouse for transformation but only if it receives some support to act.

We will continue to lobby for Social Investment Tax Relief to be made available for community energy schemes and will call for the government’s imminent Energy White Paper (and the Net Zero Plan) to be used to put people at the centre of energy policy, as consumers, but also as participants, innovators and leaders in the increasingly local, low carbon energy system. Community energy is the key to this engagement.