HC Deb 18 April 2002 vol 383 cc1139-40W
Mr. Stunell

To ask the Secretary of State for Trade and Industry how much direct Government funding has been made available to the renewables sector in the last financial year and the following year for(a) research and development, (b) capital investment and (c) revenue support; and to which projects it will be allocated. [50434]

Mr. Wilson

The Renewables Obligation, the Government's main policy instrument for the promotion of renewable energy, came into effect from 1 April, and is financed through payments by electricity consumers. The earlier Non Fossil Fuel Obligation (NFFO) was also financed in this way. Hence most public support for renewable energy is not direct Government funding.

Estimated maximum payments available under the Renewables Obligation for England and Wales and the corresponding Renewables Obligation (Scotland) for 2002–03 are £282 million. The level of the obligation is set to rise each year to 2010–11, when maximum payments for the year are estimated to reach £1 billion. Actual payments, and the projects that will benefit, will depend on the capacity coming forward. Estimated payments from NFFO and comparable arrangements in Scotland in 2001–02 were £85.5 million. Payments under these arrangements are expected to decline substantially from 2002–03 onwards, following the introduction of the Renewables Obligation.

The Government directly fund research and development in renewable energy through the DTI's Sustainable Energy Programme and through the Research Councils.

£ million
2001–021 2002–032
DTI Sustainable Energy Programme 13.0 19.0
Research Councils 5.0 5.6
1Revised estimated spend

Research projects are currently funded in the following programme areas: biomass; waste; embedded generation; fuel cells; solar; wind; hydro; wave; tidal; technology transfer and exports. I am placing in the Libraries of the House a list of research projects funded under the DTI's programme in 2001–02. Details of relevant current research projects funded by the Engineering and Physical Sciences Research Council (EPSRC) can be found on the EPSRC website http://www.epsrc.ac.uk/epsrcgrants/portfolio.asp by selecting 'Research Topics' and then 'Electricity Generation——Renewable and Clean'.

In addition to the research programmes described, the DTI has been assigned a further £5 million over three years for wave and tidal demonstration projects and a further £4 million for net metering storage and control demonstration projects.

The Government are also setting up capital grants programmes in the following areas with the following funding over three years: £74 million for offshore wind (including £10 million from the New Opportunities Fund) £69 million for bioenergy (including £36 million from the New Opportunities Fund and £3 million for biomass heating) £20 million for photovoltaics (PV).

In addition, an element of the £10 million Community and Household Projects programme is expected to finance capital costs of these projects. Actual spend in each financial year, and the projects that will be supported, will depend on the applications coming forward.

As has been indicated, revenue support for the renewables sector is provided through the Renewables Obligation rather than through direct Government funding. The sector also benefits from exemption of renewable electricity from the Climate Change Levy.