Autumn Statement

Category : News

23/11/16

This afternoon the Chancellor presented the Government’s Autumn Statement to Parliament. The Autumn Statement is an update on the Government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility and sets out the Government taxation and spending plans.

The Statement was relatively light on energy market related announcements, however key points to note are:

  • The cap on the Carbon Price Support rates of £18t/CO2 will remain, uprated with inflation to 2020-21.
    The government stated it will continue to consider the appropriate mechanism for determining the carbon price in the 2020s.
  • The Government will set out the future of the Levy Control Framework in Budget 2017.
    The government restated its commitment to decarbonising the economy while limiting costs on bills, and announced that it will continue to engage stakeholders as it develops an emissions reduction plan. The government is considering the future of the Levy Control Framework (which sets a cap for the forecast cost of certain policies funded through levies on energy bills) which it will set out at Budget 2017.
  • Green Paper to be published in Spring 2017 that will “examine markets that are not working fairly for consumers.

The Chancellor confirmed that Government “will look carefully over the coming months at the functioning of key markets, including the retail energy market, to make sure they are functioning fairly for all consumers.” Although it is not yet clear whether the Green Paper will extend to energy retail markets.

In response to the Government carbon pricing commitment Martin Pibworth, SSE Managing Director, Wholesale, said: “SSE has consistently advocated for carbon pricing as a cost effective way to meet the UK’s energy objectives. It therefore welcomes the Government’s reaffirmed commitment to carbon pricing by maintaining the Carbon Price Floor to April 2021. SSE will work with Government and partners to make the case for carbon pricing into the 2020s.”

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