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Spring Budget 2023: What was missing for the electrical industry?

UK Government announces Spring Budget 2023

The UK Government has officially unveiled its Spring Budget, with a whole host of spending commitments for the electrical industry included.

In a series of articles on Electrical Review, we plan to share both the industry’s reaction as well as the top announcements from the Spring Budget, which was unveiled on March 15.

In this final part, we will detail what was missing from the UK Government’s Spring Budget that the industry had asked for. Make sure to check out all the other parts to ensure you don’t miss out.

There is often a big list of items that the Chancellor is asked for as part of the Spring Budget, and inevitably the UK Government can’t satisfy everyone. However, here are some of the larger commitments that the Spring Budget 2023 lacked. 

Energy efficiency 

The UK Government has thus far chosen to not further expand its energy efficiency programmes. That means while you can still get solar panels and energy storage installed without having to pay VAT, there’s currently no other incentives for improving the energy performance of either commercial or residential buildings. 

myenergi had asked for solar EV chargers to fall under the same scheme as solar panels and energy storage, however, it failed to receive a commitment from the Chancellor. In fact, the UK Government currently only offers two incentives for the installation of EV chargers — the EV chargepoint grant and the EV infrastructure grant. 

Both of those grants are targeted at either residential and commercial landlords or commercial property owners, however, meaning UK homeowners now have to fund the cost of installing an EV charger all by themselves. 

Energy storage

There was also a lack of commitment towards the installation of new energy storage projects, which could play a huge role in balancing the grid when there’s both a glut of renewable generation, as well as when there’s a lull. 

Late last year the Government did commit to £32 million of funding for the energy storage sector, but that pales in comparison to the £20 billion it has committed to carbon capture and storage, or the investment it plans to make in nuclear energy. 

UK battery manufacturing

Alongside energy storage, there was also no new mention of battery manufacturing in this year’s budget. Given the collapse of Britishvolt earlier this year, as well as its rescue by Recharge Industries this is an area of the UK’s economy that is ripe for investment. 

In fact, the former boss of Aston Martin has previously noted that the UK would need four new gigafactories or risk losing its entire automotive industry. Thus far the UK has just one facility making batteries for electric vehicles, which is run by Chinese firm Envision on behalf of Nissan in Sunderland.

Matt Hardwick, a partner at Akin Gump, noted, “Given the fundamental importance of the industry sector, it was surprising to see no pledge from the Chancellor to support the build out of battery manufacturing capacity in the UK. Without a clear strategy to build out electronic vehicle (EV) and energy storage battery manufacturing capacity, the UK risks its supply requirements being exported and with it the associated value, jobs and skills creation opportunity. 

“In the context of EV batteries, it is also likely to herald the export of a significant part of our EV manufacturing capacity, given the desire by EV manufacturers to co-locate or integrate these two aspects of the EV value chain. We have to hope that the Government has left something in the tank, so to speak, and that we will see announcements for support in this critical area in weeks to come.”

Renewable energy investment

There were also no new commitments when it comes to renewable energy, with nuclear stealing the show during this year’s Spring Budget. That’s surprising given the Climate Change Committee’s prediction that 70% of electricity in the UK will come from solar and wind farms by 2035. 

However, Boris Johnson’s premiership was more keen to act on renewables than Rishi Sunak has been thus far. Although he has signalled that he is willing to ease planning requirements for onshore wind farms, after facing a massive rebellion from the Tory backbenchers in December 2022, and put an end to the planned ban on solar farms which was proposed by his predecessor Liz Truss. 

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