The Government's decision to only slightly increase the budget for renewables announced in the Treasury's Spending Round yesterday (26 June) brings its long term support for the sector into question, according to the Renewable Energy Association (REA).
To meet energy and climate targets, the spending on renewable heat technologies needs to roughly double every year in the early years. REA says that this would have suggested a budget of around £800m in 2015-6. Instead, the budget is only £430m, only a slight increase on the £424m set for 2014-15.
Although renewables currently accounts for only 2% of heating, it has to grow six-fold to 12% by 2020.
REA chief executive, Gaynor Hartnell, said: 'It is important that the UK meets its renewables target in the most cost-effective way possible. Heating from biomass is one of the cheapest means of doing this. This poor settlement, coupled with next week's tariff reductions for medium scale biomass installations, sends a very bad message over the Government's long term support for this sector.'
She added: 'The UK needs a massive expansion in renewable heat to meet climate change objectives - which will create jobs and growth all along the supply chain. The Government should be doing all it can to get the RHI back on track, not cutting its budget.'
However, the REA says it welcomes the Chancellor's acknowledgement of the growth opportunities in energy and infrastructure and his pledge to deliver 'the energy of the future at a price that is affordable'.
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