In short, a reference was made to a review of the carbon floor prices which were to be capped and remain so until 2018, rather than rise with inflation as they had been – no change but perhaps more in the Autumn.
The levy control framework which saw support for decarbonisation of the UK’s electricity generation which is still on track to rise from £2bn to £7.6bn between 2011/12 and 2020/21 will be “reviewed” later in the year, most likely to reflect the poor response to capacity mechanism auctions and unexpected price signals sent to existing fossil fuel generators and the lack of new renewable generators coming into the market in response to the Contracts for Difference regime.
Finally it provides some support for North Sea producers who take on older fields with the intention of continuing to extract, whilst removing some of the tax relief from the original operators to also encourage continued production in these so called “late life” assets.
More concrete proposals would be made, at the earliest, in the Autumn statement for the Carbon issues and Levy Support, with a discussion paper for North Sea assets to be followed by possible taxation changes for operators.
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