In yesterday's Budget announcement, George Osbourne has confirmed a carbon tax reform in addition to a new CfD funding model.
In the 2016 Budget, the Chancellor, George Osbourne has confirmed a reform of business carbon taxes as well as a new round of funding for innovative energy storage projects in the UK.
In his eight budget announcement, Osbourne revealed new carbon reporting regulations, while confirming the details of the next Contracts for Difference auction, with new funding for energy storage and demand-side response technology.
It was confirmed that the Carbon Reduction Commitment (CRC) will be abolished from the end of the 2018-19 compliance year and will be replaced in a "revenue-neutral way" via a rise in Climate Change Levy (CCL) rates from 2019.
The next round of Contracts for Difference (CfD) auctions will also be allocated £730m (double the amount of the first CfD auction) for up to 4GW of onshore wind generation and other small-scale renewable projects.
In addition to a change in carbon tax and CfDs, the Chancellor also confirmed that 'at least £50m' would be designated for the research of innovative energy storage and demand-side response technologies.
However, the focus was not just on renewable energy as the government has pledged to support the UK's fossil fuels industry by reducing the supplementary charge for gas and oil producers from 20% to 10%. A small modular nuclear reactor is also set to be built in the UK and at least £30m of funding will be allocated for the research and development of advanced nuclear manufacturing.
To read more about the current CCL and CRC conditions, visit the Green Energy Services section of the Apollo Energy website. Or if you would like a further summary on this year's Budget announcement, download our Budget 2016 - Summary of Changes to Business Taxes & Reporting Brief.