Spending Review 2010: Impact on Energy Sector

Background

The Budget released in June 2010 set out the overall level of Government spending for the four years from 2011/12 to 2014/15. The Spending Review released today is the process through which this spending is allocated to pay for all areas of Government activity including public services, social security, and administration costs. Spending Reviews aim to allocate resources across Governmental departments over several years. Each department is then able to manage and distribute this budget internally.

The Spending Review confirmed the anticipated reductions in the budgets of a number of key areas of public sector provision, including the announcement that the Department of Energy and Climate Change (Decc) will be cut by 5%. Importantly, the Government highlights their continued support for "action on renewables" and the commitment to obtain 15% of energy from renewables by 2020 in supporting the roll out of large and small scale technologies, including renewable heat.

We have set out below the key elements of the Spending Review and how they effect the renewable energy market and in particular the impact that this reduction will have on Decc.

Spending Review 2010

1. Feed in Tariffs (FITs)

   The Spending Review does not provide for any major change to FITs, it simply notes that the...