Institution responds to Budget 2013

The Institution's Dr Tim Fox says the budget includes some positive announcements but that it was disappointing that there wasn't more clarity on the 'strike price' for nuclear power.

Dr Tim Fox, Head of Energy and Environment at the Institution of Mechanical Engineers said in response to the Chancellor George Osborne’s budget:

“Today’s budget includes some positive announcements for the energy sector including the new tax regime to support UK shale gas activities, the two projects identified as preferred bidders to move into the next stage of the Government’s Carbon Capture and Storage (CCS) competition and more broadly the £3 billion investment in infrastructure projects for 2015/2016.

“But it is disappointing that the Chancellor was unable to provide more clarity on the much anticipated 'strike price' – or a guaranteed future electricity price – for power from the country’s first new nuclear project in 20 years, as this has the potential to pave the way for billions of pounds of investment into the UK economy and support thousands of jobs.

“It is particularly welcome that both a gas and coal project are through to the next stage of the Government’s CCS competition as the Institution has been calling for this for the past three years.

“Government must continue to encourage the development of a balanced power generation mix including renewables, nuclear and fossil fuels, ultimately abated with CCS.

“In addition, as we have previously highlighted, it is important for Government not to see shale gas as the silver bullet many claim it is. Shale gas is unlikely to impact greatly on energy prices in the UK and we must avoid becoming hostage to volatile gas markets by not being over-reliant on gas.

“Elsewhere in the budget, the Government’s support for energy intensive industries will help ensure that UK firms don’t lose out to companies located in countries who have less focus on climate change mitigation through greenhouse gas reduction.”