Budget 2021: Renewable Sector impact
09 March 2021
The Budget did not contain many surprises, with most provisions having been publicised in advance. There were fewer announcements on climate change and achieving the UK’s net zero target than in the previous year. Nevertheless, there was still some welcome news for the renewable energy industry, with commitments to spending on UK-wide infrastructure projects.
- The setting up of a new infrastructure bank this spring. As well as £12bn in equity and debt the bank will be able to issue up to £10bn of guarantees, to finance local authority and private sector projects, including in renewables.
- Freeports offering tax incentives to attract investment in national hubs for global trade. This will include offshore wind infrastructure manufacturing support in Teesside and Humberside
- £31.8m of support for hydrogen and offshore wind hubs (Aberdeen Energy Transition Zone and Holyhead Hydrogen Hub).
- This summer, the government will issue at least £15bn in sovereign green bonds (‘green gilts’) to finance green objectives, including infrastructure investment. Further details are to follow in June.
- Renewable energy infrastructure expenditure may also be able to benefit from the capital allowances ‘super deduction’. For qualifying expenditure incurred between 1 April 2021 to 31 March 2023, companies can claim in the period of investment:
- 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
- A first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.
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