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U.K. Carbon Capture, Clean Heat May See Spending Cuts, HSBC Says
2010-10-14 11:04:26.197 GMT
By Alex Morales
Oct. 14 (Bloomberg) -- U.K. government programs to fund
carbon capture and storage and domestic heating from renewable
sources are among environmental policies most at risk from
spending cuts to be announced next week, HSBC Holdings Plc said.
Plans to raise the energy efficiency of buildings and boost
offshore wind power have the "lowest downside risk," leaving
other areas exposed, Nick Robins, head of HSBC's Climate Change
Centre in London, said today in an e-mailed note.
"Carbon capture, electric vehicles, renewable heat and
rail are most at risk of cutbacks," Robins wrote in the note to
investors. Funding for renewable heat may be cut and delayed
while a proposed tax on consumer energy bills that would fund
CCS demonstration projects may be reduced, potentially cutting
the proposed number of four pilot plants, he said.
The government is due to set spending cuts for each
ministry on Oct. 20 that may amount to 25 percent over four
years, and Energy and Climate Change Secretary Chris Huhne has
said all spending for his department is under review.
Feed-in tariffs for small-scale renewable projects,
including solar panels for houses, aren't likely to be cut
retroactively though the planned review date of 2013 may be
brought forward, HSBC said.
Capital spending of 16 billion pounds ($26 billion) on
high-speed rail and 15.9 billion pounds on London's Crossrail
projects, which fall within the Transport department's budget,
aren't likely to be canceled though expenditure may be delayed
to later years, Robins wrote. Subsidies for electric vehicles
after 2012 may be cut, he said.
While about 2 billion pounds of funding for larger scale
renewables, including offshore wind, is at lower risk of being
cut, 60 million pounds of proposed spending to upgrade port
facilities is "of greater concern," the bank said.
Wind-power companies have said port facilities need
upgrading to be able to handle large machinery such as turbines
and attract manufacturers to set up domestic factories. General
Electric Co., Siemens AG and Vestas Wind Systems A/S this week
were among companies that urged the U.K. to retain the ports
funding.
For Related News and Information:
Renewable energy top stories: GREEN <GO>
U.K. power-market news: TNI UK PWRMARKET <GO>
Today's top energy page: ETOP <GO>
U.K. electricity prices: ELEU <GO>
--Editors: Baldave Singh, Randall Hackley
To contact the reporter on this story:
Alex Morales in London at +44-20-7330-7718 or
amorales2@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net.
