Energy in Spring Budget 2024 

On 6 March Chancellor Jeremy Hunt presented his Spring Budget to the House of Commons. Let’s look at some of the energy and sustainability highlights.

Businesses

Budget of the next Contracts for Difference Allocation Round 

The government has published full parameters for the Contracts for Difference Allocation Round 6, including setting what is described as “the largest ever budget for a single round”, over £1 billion. 

Funding boost for energy and transport smart data consultations

Following 2023 Autumn Statement announcement that the government would seek to maximise the benefits from incoming Data Protection and Data Information Bill Smart Data powers, the government is providing targeted funding for consultations and calls for evidence to accelerate smart data schemes in energy and transport.

Industry

Energy Profits Levy extended

According to HM Treasury, gas prices are forecast to remain abnormally high until at least 2028-29. Therefore, the government is extending the Energy Profits Levy by an additional year until March 2029. The government will include legislation in the Spring Finance Bill 2024 to disapply the levy when prices return to normal.

Electricity grid reform

The government will implement a new connections process from January 2025 and work with the Electricity System Operator to outline further interim reforms to the grid queue process by summer 2024. The government will establish the National Energy System Operator in 2024 and will publish new community benefits guidance by June.

Green Industries Growth Accelerator (GIGA) funding

The government is increasing the GIGA budget by up to £120 million to further support expansion of low carbon manufacturing supply chains across the UK.

Up to £390 million of the GIGA funding is expected to go to supply chains for offshore wind and electricity networks and up to £390 million is expected to go to supply chains for Carbon Capture Utilisation and Storage (CCUS) and hydrogen.

This sits alongside the £300 million already allocated to nuclear fuels for the High Assay Low Enriched Uranium (HALEU) programme.

Policy & Regulation 

Extension of Growth Duty to Ofgem, Ofwat and Ofcom

As announced at Autumn Statement, the government will extend the Growth Duty to Ofwat, Ofcom and Ofgem and publish refreshed Growth Duty guidance. The government will also publish a Regulator Performance Framework in the coming months that is set to encourage “greater regulator agility, efficiency and responsiveness.”

Regulation of Environmental, Social and Governance (ESG) Ratings

The government will regulate providers of Environmental, Social and Governance (ESG) ratings to users within the UK. ESG ratings providers will be brought into the regulatory perimeter of the Financial Conduct Authority.

Where can I find more information?

Spring Budget 2024 can be found on the gov.uk website.