§ Mr. Randall
To ask the Secretary of State for Trade and Industry if she will make a statement on her Department's plans to encourage the use of renewable energy. 489W
§ Brian Wilson
The Government are providing substantial support to industry to encourage the use of renewable energy.
Introducing the new renewables obligation, exempting renewables from the climate change levy and protecting existing non-fossil fuel obligation (NFFO) contracts will together create a long-term market incentive for renewables worth over £1 billion per year by 2010.
We are underpinning the obligation with direct Government funding for renewables worth over £260 million between 2001 and 04. We are setting up extensive capital grants programmes, in particular for offshore wind and energy crops projects, initiating a major photovoltaics demonstration programme, and boosting research and development.
We recently introduced an order to allow locational flexibility for NFFO 3, 4 and 5 projects that have not yet been commissioned. This will allow more appropriate locations to be found in order to overcome problems in securing planning permission.
We have initiated studies of each UK region's capacity to generate electricity from renewable sources. Once all these assessments are completed, it is expected that specific regional targets for renewable energy will be adopted across the UK. We are also publishing an overview of those regional assessments.
The Government are also exploring the scope for upgrading the electricity distribution system to enable the UK's huge renewable energy resources to be exploited to the full. For example, an initial study of the feasibility of an underwater cable to connect parts of the western seaboard of the UK directly to the national grid has recently been completed. We shall be moving to a more detailed study of all the options and their costs.