§ Mr. Peter AinsworthTo ask the Chancellor of the Exchequer what plans he has to improve fiscal incentives for the development of combined heat and power plants. [15512]
§ Mr. BoatengGas or coal used by good quality combined heat and power systems is exempt from the climate change levy. Electricity produced by such systems is also exempt if it is used on the site where it is generated or if it is sold through a bilateral contract to another end user. Good quality CHP systems are also eligible for 100 per cent. enhanced capital allowances as part of the Government's climate change levy package. The Government are considering how best to encourage CHP and will be publishing proposals in the form of a CHP strategy in the coming months.