Simon Virley, UK Chair of Energy and Natural Resources at KPMG, comments on the summer budget 2015 announcement.
“The latest forecasts from the Office of Budget Responsibility (OBR) show a significant overspend on low carbon subsidies under the Levy Control Framework (LCF). The Government now faces some hard choices on which subsidies to cut in order to bring spending back under control. The Government has signalled its support for nuclear power and gas-fired generation, whilst ending support for new onshore wind farms. But investors in other low carbon sectors like solar, offshore wind, tidal energy, CCS and biomass will be waiting for clearer signals before committing to any future projects.
“Given the UK energy market relies on highly mobile international capital, investors will need greater certainty soon about the tax and funding frameworks for UK energy investments, or that capital will increasingly be diverted to opportunities elsewhere. Any stalling on investment into the UK low carbon sector would be a difficult backdrop as the Paris Climate Change Conference comes into view.”
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Ann Burton, KPMG Corporate Communications
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.