HC Deb 27 June 2000 vol 352 cc458-60W
Mr. Llew Smith

To ask the Secretary of State for Trade and Industry what steps he has taken in the past 12 months to support the manufacturers of renewable energy technology; and what support he makes available to promote overseas sales of renewable energy technology and energy efficiency services. [127568]

Mrs. Liddell

The Government have taken significant steps to support renewable energy manufacturers in the last 12 months.

The Government launched a new regional planning initiative for renewable energy in the summer of 1999. In November 1999 the Government issued two consultation papers, on network management and licensing issues for embedded generation, of direct relevance to renewables, and in December 1999 it announced its intention to allocate around £30 million to the growing of energy crops over the six years up to March 2007. The Government also announced plans to exempt all forms of renewable energy, including electricity generated from renewable sources, from the Climate Change Levy, which will be introduced in April 2001, providing a substantial financial incentive for its use.

On 1 February 2000, to coincide with the Second Reading of the Utilities Bill, the Government published "New and Renewable Energy—Prospects for the 21st Century: Conclusions in Response to the Public Consultation". The Conclusions Document summarises key elements of the Government's policy. They are: a new Renewables Obligation on licensed electricity suppliers; exemption of electricity and heat from renewables from the Climate Change Levy; an expanded support programme for new and renewable energy including research, development, demonstration and dissemination; and development of a regional strategic approach to planning and targets for renewable energy.

The Renewables Obligation will enable the Government to make progress towards a target of generating 10 per cent. of our electricity from renewable sources by 2010, subject to the cost to consumers being acceptable. The Government are also taking steps to set up transitional arrangements to ensure that Non-Fossil Fuel Obligation (NFFO) contracts continue to be viable in the future.

The renewables industry is also benefiting from the increased renewables R & D budget, expected to be £32 million over this and the next financial years.

Export opportunities in renewables technologies and services are a priority area for DTI support. DTI supports renewable energy technology in overseas markets in numerous ways, among them financial support for feasibility studies, country profile reports on renewables, and grant-supported outward and inward missions. For example we have recently sponsored two inward missions from China, concentrating on wind energy in the UK.

Support for energy efficiency services is a matter for my hon. Friend the Secretary of State for the Environment, Transport and the Regions.

Mr. Llew Smith

To ask the Secretary of State for Trade and Industry what his timetable is for responding to the recommendations of the Royal Commission on Environmental Pollution report, Energy-The Changing Climate. [127625]

Ms Hewitt

I, together with my right hon. Friend the Minister for the Environment, and other colleagues, will be giving careful consideration to the recommendations in this report and we will be aiming to respond within a year. In the meantime, the Government are considering responses to the draft Climate Change Programme, and plan to publish the final version in the autumn.

Dr. Whitehead

To ask the Secretary of State for Trade and Industry (1) what plans he has to enable unfulfilled Non-Fossil Fuel Obligation contracts for the supply of wind energy from onshore locations to be implemented anywhere within the area of sea within the Government's jurisdiction; [127584]

(2) if he will enable Non-Fossil Fuel Obligation contracts to be implemented anywhere within the Government's jurisdiction. [127585]

Mrs. Liddell

The Government have no locus in the contracts entered into by the Public Electricity Suppliers (PES) to secure the generating capacity from renewable sources of electricity required by the non-fossil fuel obligation (NFFO) Orders. These contracts are location specific and any amendment to their location needs to be agreed between the contracting parties. In addition the Office of Gas and Electricity Markets (Ofgem) needs to be satisfied that the amendment does not cause the contract to cease to be a qualifying arrangement. If the contract ceased to be a qualifying arrangement the PES would not be eligible to receive fossil fuel levy for the electricity generated. I have asked the Non-Fossil Purchasing Agency Ltd. and Ofgem to re-examine the scope for amendments which would allow projects that have been frustrated by circumstances outside the control of the generator to go forward to construction and generation. Their re-examination has not yet reached a conclusion.

Mr. Gibb

To ask the Secretary of State for Trade and Industry if he will make a statement on the proposed new gas trading arrangements. [127479]

Mrs. Liddell

The term "new gas trading arrangements" covers a number of exercises, led by the Director General of Gas Supply and his office Ofgem, aimed at securing effective competition in gas supply and the economic and efficient operation of Transco's pipeline system. These include auction arrangements for entry capacity into the national transmission system and an on-the-day commodity market for balancing purposes, both introduced with effect from October 1999. Work is in hand on further refinements to the capacity and energy balancing regimes, including reviews of the exit capacity regime and of the possibility of introducing a linepack regime. Further background is available on the Ofgem website www.ofgem.gov.uk.