Renewable Energy

HC Deb 15 February 2001 vol 363 cc441-3

4. Mr. David Kidney (Stafford)

Which of his Department's funds support the creation of new businesses in the renewable energy sector. [149003]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt)

New businesses in the renewables energy sector, as in other sectors, may be eligible to apply for enterprise grants, regional selective assistance, smart awards, help from the small firms loan guarantee scheme and so on. However, businesses in renewable energy are also directly supported by the non- fossil fuel obligation, the proposed renewables obligation capital grants and an increasing research and development budget.

Mr. Kidney

I thank the Minister for that answer. Does she share my belief, and that of my ever-enthusiastic constituent, Mr. Bob Talbott of Talbott Heating Ltd., that the growing demand for renewable energy sources in this country and around the world genuinely offers the prospect of a new generation—excuse the pun—of manufacturing jobs, making the things that generate the energy? Will the Minister and the Government be alert to opportunities to promote United Kingdom manufacturing jobs in those new industries?

Ms Hewitt

I entirely agree with my hon. Friend and with his constituent. The renewable energy sector already employs some 4,000 people in about 800 companies across the United Kingdom. We have set a target that 10 per cent. of overall generation will come from renewable energy in the next 10 years, which will require a threefold expansion in generation from renewable energy. We want to ensure that that benefits British high-tech manufacturing industry and creates more jobs in Britain.

Mr. Brian Cotter (Weston-super-Mare)

The Minister's comments on renewable energy firms are very encouraging, but will she recognise the fact that 4,000 new firms start every year and that such a big sector needs support? The incubator scheme proposed in the White Paper, which has just been announced, is designed to assist 2,500 firms, and another scheme is designed to help 1,000 firms over three years, but many other firms will clearly need support and new firms are coming through. Does the hon. Lady believe that it is also important to offer continuity of support to firms, as nearly 50 per cent. of them fail within two years?

Ms Hewitt

The Small Business Service that we have created and the new business links network throughout the country are designed to provide exactly that high-class support to businesses at every stage of their life cycle, including pre-start-up and growth. We are also making available in the renewable energy sector £89 million in capital grants, introducing a new renewables obligation and providing additional help for R and D, all of which will help to create more businesses specifically in that sector.

Mr. Bob Blizzard (Waveney)

Does my hon. Friend share my view about the enormous potential that lies in the development of offshore wind energy? As well as providing a supply of renewable energy free of some of the obstacles of the planning system, it offers firms in the offshore oil and gas sector, which is declining at the moment, opportunities to diversify. Will she join me in welcoming the proposal by SLP, a firm in my constituency, to build a wind turbine and a renewable energy centre at Britain's most easterly point, Lowestoft?

Ms Hewitt

I certainly welcome that and I congratulate SLP on its initiative. The £89 million of capital grants to which I referred are available specifically for offshore wind energy projects, which have enormous potential. We are also supporting demonstration wave energy projects, which can help to stimulate the growth of the offshore energy market.

Mr. Roy Beggs (East Antrim)

Will the Minister seek to ensure that relevant Departments and planning authorities are fully aware of Government policy on, and support for, renewable energy? Does she agree that consultation between promoters of renewable energy projects, planners and environmentalists is a better way of resolving disputed planning applications than expensive public inquiries and appeals procedures?

Ms Hewitt

The hon. Gentleman is absolutely right. Planning concerns are expressed about many proposed renewable energy projects, and his suggestion that these matters are best resolved through sensible dialogue within local communities is exactly right.

Mr. David Chaytor (Bury, North)

In view of the record profits announced this week and in recent weeks by some of the world's leading non-renewable energy companies, does my hon. Friend think that if the Chancellor could be persuaded of the merits of a windfall tax on oil companies it would provide a revenue stream for investment in the development of renewables that would enable the United Kingdom to be a global leader in renewable energy technologies, exactly as it is in the climate change strategy?

Ms Hewitt

Oil companies are making substantially increased investment in the North sea fields. They are also investing in new sources of renewable energy. Any other issues to which my hon. Friend referred are of course a matter for my right hon. Friend the Chancellor.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

It is interesting to note that the hon. Lady has taken over responsibility for renewable energy from the new Minister for Energy and Competitiveness in Europe. However, she shares with the hon. Gentleman an important task in trying to put together a coherent energy policy, which both their predecessors spectacularly failed to deliver over the past four years, particularly on the issue of rising CO₂ emissions as Magnox stations are decommissioned.

At the moment, only 2.8 per cent. of electricity generation is from renewable sources, so the general view in the industry is that the Government's target of 5 per cent. from renewables by 2003 is completely unrealistic. How confident is the Minister that the target will be met? If it is not met, what will be the consequences for the CO₂ emission figures and energy policy generally, which are both based on the assumption that it will be met?

Ms Hewitt

We are working actively with the sector to achieve that target, which is more than the previous Administration did. The non-fossil fuel obligation—the existing obligation—and the proposed renewables obligation have led to an increased demand from energy users for energy that is generated from renewable sources. The fact that the climate change levy has been carefully designed to give an exemption for energy that is generated from new renewable sources is further stimulating that demand. I am confident that we will work successfully with the industry to achieve our targets.