Payments to fossil fuel plant now being counted as 'environmental' by Treasury

In a move that will astonish many the Treasury have decided to count payments to existing fossil and nuclear power stations for providing capacity as 'environmental' levies'. Real environmental spending is, as a result of the Government's policies, falling, and is being replaced by payments for polluting power stations. This 'levy' money is collected as a levy on consumer energy bills. See the Table below complete with newly added budget line 'capacity market'.
The fear must be that as so-called environmental levies increasingly consist of payments to power stations to provide capacity, funding for renewables and energy efficiency will increasingly be crowded out by subsidies to fossil fuel power stations and nuclear power. Meanwhile spending on energy conservation has been slashed in this statement, and support for solar power and onshore wind cut to next to nothing in policy statements made earlier in the year. See some commentary on the latest cuts to energy efficiency spending at http://energydesk.greenpeace.org/2015/11/25/daily-dispatch-optimism-over-paris-tempered-by-calls-for-extra-money-for-worlds-poor/

The capacity mechanism has been introduced as a measure to encourage power station developers to bring new plant on line. You can see a description of the first auction at https://www.gov.uk/government/news/first-capacity-market-auction-guarantees-security-of-supply-at-low-cost
You can see comment by me on this at http://realfeed-intariffs.blogspot.co.uk/2015/10/government-heading-for-electricity.html and also in the context of Government plans energy plans at http://realfeed-intariffs.blogspot.co.uk/2015/11/amber-rudd-re-set-do-nothing-fantasy.html

So now we have a new policy - to extend a phrase used by the PM's office before the 2015 General election - 'cut the green crap'  - and spend it on brown crap instead! This is not a joke. The inclusion of the capacity mechanism under environmental levies is very serious indeed. This is because many believe that spending on the capacity mechanism will mushroom - and do so well beyond the figures mentioned in the Treasury below. The Government's policy is a very serious, perhaps mortal, blow for any UK programme to carry on reducing carbon emissions beyond 2020 or even 2018.
NOTE: I am corrected by Jon Ferris who points out that my original assertion (now deleted) that payments made through the capacity mechanism count towards the cap on low carbon spending is incorrect. Although the capacity mechanism is counted as being part of the 'levy Control Framework', The Government's energy statement, in 2014 at least, says that this is not included in caps on 'low carbon spending'. The extent to which this is a fine distinction may, in the light of the shifting emphasis of spending, be a matter of opinion! But I bow to John' in this case as a matter of form!
The Treasury figures........ 

2.7 Environmental levies
	� billion
	Outturn	Forecast
	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21
Carbon reduction commitment	0.6	0.7	0.7	0.5	0.5	0.5	0.5
Warm homes discount1	0.0	0.3	0.3	0.3	0.3	0.3	0.3
Feed-in tariffs1,2	0.0	1.3	1.5	1.7	1.9	2.1	2.2
Renewables obligation2	3.1	3.9	4.6	5.4	5.9	6.0	6.2
Contracts for difference	0.0	0.0	0.2	0.5	1.1	2.2	2.8
Capacity market	0.0	0.0	0.0	0.0	0.6	1.0	1.1
Environmental levies	3.6	6.2	7.3	8.5	10.3	12.2	13.1
Note: This is consistent with the 'Environmental levies' line in Table 4.6 of the November 2015 Economic and fiscal outlook.
1 The ONS have yet to include Warm Homes Discount and Feed-in Tariffs in their outturn numbers.
2 Forecasts do not include the outcomes of the consulatations on feed-in-tariffs or renewables obligation that have yet to be decided.

source:

Chart 2.7, Economic and fiscal outlook supplementary fiscal tables � November 2015, http://budgetresponsibility.org.uk/economic-fiscal-outlook-november-2015/