CRC revenues will now fund public purse

The Department of Energy and Climate Change has announced it will have its administration budget cut by a third. It will also cut resource spending by 18% in real terms, […]

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By Sumit Bose

The Department of Energy and Climate Change has announced it will have its administration budget cut by a third. It will also cut resource spending by 18% in real terms, but increase capital spending by 41% in real terms.

The highlights of the review include:

£: Up to £1 billion of investment to create one of the world’s first commercial-scale carbon capture and storage demonstration plants.

£: Funding of £860 million for the Renewable Heat Incentive which will be introduced from 2011-12.

£: A £200 million boost for low-carbon technologies including offshore wind technology and manufacturing infrastructure at port sites.

£: Cuts to the Warm Front programme over the next two years.

£: From 2013, support for heating and insulation for the most vulnerable will be delivered through the Green Deal for energy efficiency and a new obligation on energy companies.

£: From April 2011, energy suppliers will have to provide greater help with the financial costs of energy bills to more of the most vulnerable fuel poor households, through the Social Price Support.

£: An independent review of the fuel poverty target and definition before the end of the year.

£: Revenue raised from the Carbon Reduction Commitment (CRC) will be used to support the public finances including spending on the environment, rather than recycled to participants.

£: Feed-In Tariffs will be refocused on the most cost-effective technologies saving £40 million in 2014-15. The changes will be implemented at the first scheduled review of tariffs.

£: The Nuclear Decommissioning Authority (NDA) will get a boost in capital funding

£: The Government will review the work of the Carbon Trust, Energy Saving Trust, the Coal Authority and the delivery arm of Ofgem.

£: No Government funding for the National Nuclear Centre of Excellence, and refocusing contributions to international institutions.

£: DECC will issue guidance and help other Government departments and buildings to reduce waste on energy costs, helping to cut the Government’s £95 million annual energy bill.

Commenting on the changes, Energy Secretary Chris Huhne said: “DECC is playing its part in tackling the deficit. Like the rest of the public sector we have taken some tough decisions, but we remain on course to deliver on our promise to be the greenest government ever. We will help create green jobs and green growth – and secure the low carbon investment we need to keep the lights on.”