While a lot of the Chancellor Jeremy Hunt’s eye-catching commitments rested on boosting the employment market through childcare and a handful of levelling up measures, there are also some notable points around energy. We analyse what you need to know.
Nuclear energy’s reclassification as ‘environmentally sustainable’
Nuclear power is now viewed as environmentally sustainable, opening it up to receive the same investment incentives offered to renewable sources. The Conservatives have long been fans of nuclear as a source of power and this legitimises the belief it’ll be a crucial part of many businesses’ energy portfolios as net zero plans increase.
Hunt announced this was part of a new project called Great British Nuclear (GBN) to bring down the costs of the power source. This includes incentivising the design of small modular reactors to provide more targeted support for the National Grid.
Carbon Capture, Usage and Storage (CCUS) to receive an investment boost of £20billion
To further boost his government’s 2050 net zero commitments, Hunt announced £20 billion of funding for CCUS. The investment will, he stated, be “starting with projects from our East Coast to Merseyside to North Wales”. The announcement comes hot on the heels of the US government’s similar pledge in December 2022, when President Biden allocated $3.7 billion for CCUS development.
He also announced details of forthcoming legislation in a future Finance Bill where tax savings will be available for CCUS, through tax treatment of payments into decommissioning funds.
Energy efficiency funding will be improved
£100 million of support for charities and community organisations alongside a further £63 million for public swimming pools marked the two eye-catching interventions to support businesses most at risk from energy costs.
There was also an extension of tax relief for business energy efficiency; the 50% First Year Allowance (FYA) now lasts for another three years from 31st March 2023 to 31st March 2026. A new scheme, Full Expensing, was announced alongside it, allowing taxpayers to deduct 50% of the cost of plant and machinery. Solar panels and thermal insulation are among the energy-specific assets falling under the banner.
Climate Change Agreement (CCA) scheme extended by two years
Domestic energy bills witnessed a boost as Hunt answered the calls of Martin Lewis, among others, by extending the Energy Price Guarantee (EPG) at £2,500 for another three months from April to June.
He also responded to pressure from the likes of the Cold Chain Federation to boost businesses eligible for the CCA. The result is £600 million of tax relief for energy-intensive businesses committing to reducing their consumption.
If you think your business might be eligible for a CCA or want to know more about how the budget impacts your energy, get in touch.
2/05/2024
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29/04/2024
