UK Budget sets green alarm bells ringing

UK chancellor George Osborne has set off alarm bells among renewable investors in his Budget speech by backing a central role for natural gas.

Osborne says gas is cheap, emits much less carbon than coal and will be the largest single source of the country's electricity in the coming years.

His comments come at a time of wider debate as to whether a new age of gas will overshadow investment in renewables.

Osborne says clean energy will be an infrastructure priority on a par with roads and broadband. “I also want to see investment in our world-leading energy sector, including renewables,” he says.

The chancellor says renewables "will play a crucial part in Britain’s energy mix, but I will always be alert to the costs we’re asking families and businesses to bear. Environmentally sustainable has to be fiscally sustainable too”.

He plans to introduce a carbon floor price from April 2013. However, he has offered no new funds to support green energy.

Greenpeace executive director John Sauven says: “This was a 20th-century budget for a 21st-century economy. We got tax breaks for polluters and almost complete disinterest in the green economy, one of the only sectors that has consistently delivered jobs and growth in recent years.

“British businesses stand poised to become dominant forces in the global clean-energy market, but they’re being undermined by a chancellor who seems increasingly ill-suited to the times we live in.”

Friends of the Earth executive director Andy Atkins says: “This budget sticks two fingers up at [Prime Minister] David Cameron’s promise to build a clean future, and gives a massive thumbs down to new jobs and cutting our reliance on expensive gas and oil.”

Next week, the government will publish the results of its controversial planning reforms, in the shape of the national planning policy framework. Osborne says this will "feature a presumption in favour of sustainable development, while protecting our most precious environments”.