Negotiations are to open on plans for a tidal lagoon scheme in Swansea, Chancellor George Osborne announced in Wednesday’s Budget speech.
The government is keen to explore the potential of tidal lagoon energy, believing it could provide up to 8 per cent of the UK’s electricity. The first phase of negotiations on a ‘Contract for Difference’ for the Swansea Bay Tidal project will help ministers decide whether that particular scheme is affordable and value for money.
Other energy related announcements included £20 million of new funding for surveys of the UK Continental shelf. The fund will promote exploration in the North Sea and allow better targeted drilling.
The Chancellor also pleased North Sea oil and gas sector by announcing a 10 per cent reduction to the supplementary charge on oil companies, along with a 15 per cent reduction in the rate of petroleum revenue tax and a new investment allowance replacing the existing offshore field allowances and simplifying the existing regime.
The Chancellor also announced £1.3 million to fund another year of the Big Energy Saving Network and Big Energy Saving Week programmes.
The government is to launch a consultation on lowering distribution network costs in the North of Scotland to make sure people there pay no more for electricity distribution than consumers in the next most expensive distribution area – North of Wales and Merseyside.
Renewable Energy Association’s chief executive Dr Nina Skorupska said: “We welcome the government’s ambition and willingness to invest in renewable energy infrastructure confirmed in today’s Budget. The procurement of renewable energy is crucial to meet the UK’s legally binding energy targets in a cost-effective manner, improving energy security and delivering skilled jobs and inward investment.
“However, our members will feel strongly that there was a missed opportunity to spread this commitment more widely to renewable power generation and renewable heat – both of which would thrive under a more stable regulatory framework which is fairer to smaller suppliers.
“We challenge the next government to level the playing field for emerging technologies and create a policy framework which provides long-term certainty for investors.”