HC Deb 09 December 1991 vol 200 cc598-9
9. Mr. Vaz

To ask the Secretary of State for Energy if he will make a statement about the Government's support for combined heat and power schemes.

Mr. Heathcoat-Amory

The Government fully recognise the environmental and energy efficiency benefits of combined heat and power. The Energy Efficiency Office in my Department continues to promote the wider use of the technology under its best practice programme. Interest in CHP is at a high level and the prospects for CHP in the 1990s are excellent.

Mr. Vaz

In view of Leicester Energy Limited's continued interest in the establishment of a combined heat and power scheme in Leicester, will the Minister give his wholehearted support and instruct his officials to give their wholehearted co-operation to Leicester Energy Limited in the tremendous efforts that it is making to promote that scheme?

Mr. Heathcoat-Amory

I know of the hon. Gentleman's interest in the subject. He will know that my Department gave a grant for a feasibility study into large-scale CHP in Leicester, but the scheme did not proceed. The privatisation and restructuring of the electricity industry have offered new opportunities for independent electricity-generating schemes, particularly those that combine heat generation with electricity generation. That will assist those in Leicester, if they decide to revive the scheme, and those elsewhere.

Mr. Rost

Under the Electricity Act 1989, the regulator is directed to monitor the progress of combined heat and power. Will my hon. Friend discuss with the Office of Electricity Regulation the complaints of the Combined Heat and Power Association that existing regulations contain barriers to the progress of combined heat and power, which should be removed?

Mr. Heathcoat-Amory

I know that the Combined Heat and Power Association recently submitted a report to OFFER pointing out some institutional and administrative barriers that it should like to be tackled. That is being considered, with our support, by the Director-General of Electricity Supply.

Mr. Barron

The Minister cannot fail to acknowledge what has been common knowledge in the combined heat and power industry—that the major block is electricity prices. Despite the so-called new market that the Government have created, they have never recognised the price differences between electricity from combined heat and power plants and that from conventional generation. When will they act instead of saying at every Question Time how much they are in favour of combined heat and power?

Mr. Heathcoat-Amory

The combined heat and power industry was held up for many years because it was in the hands of a state monopoly. We have ended that and have given unprecedented new opportunities for independent generators, particularly those that employ combined heat and power technology.