Budget 2011 – Key Issues affecting the Green Energy Industry

George Osborne’s announcement of the Budget 2011 addressed some important concern within the Green Energy industry.

More information was released about significant subjects such as The Green Deal and The Green Investment Bank.

The Green Deal

The Green Deal, the Government’s flagship carbon reduction policy, will encourage homeowners to make homes more energy-efficient through private sector funded loans, worth thousands of pounds. The scheme is to be announced in Spring 2011. No further information was provided regarding incentives for homeowners to take up the scheme.

The Green Investment Bank

The Green Investment Bank will be able to borrow money and raise capital, as opposed to operating just as a finite fund, Osborne confirmed. The Bank will not, however, work to full capacity until the Government has met its debt target. Osborne also confirmed an extra £2billion, in addition to the £1bn already established, for the Bank’s capitalisation. The Bank will begin operating in 2012-2013.

Carbon Floor Price

The Chancellor announced that this levy, aimed at electricity producers in a bid to encourage more investment in low-carbon energy, is to be raised. The carbon floor price is to be set at £16 per tonne of CO₂ in 2013, based on the target price of £30 per tonne by 2020.