Renewable Energy (Hansard, 28 November 2002)

§ Mr. Wilson

[holding answer 27 November 2002]Financial support to the renewable energy sector through research grants and other sources and through the non-fossil fuel levy for each year since 1990 is set out in the table.

The renewables obligation, which took effect from 1 April 2002, does not involve direct Government funding as it is a market-led measure. In this, the first year of the obligation, suppliers are expected to provide 3 per cent, of the electricity supplies from eligible renewable resources. They may meet their obligation through providing a proportion of their supplies from renewables, through buying renewable obligation certificates (ROCs) in the market or through paying the buy-out fee.

Electricity from renewable sources now also benefits from exemption from the climate change levy (which was introduced in April 2001). In addition, the Government have made provision of £250 million over three years for capital grants for renewable energy.

£million
	Renewable energy funding¹	Fossil fuel levy
1990–91	15.2	6.1
1991–92	18.0	11.7
1992–93	18.7	28.9
1993–94	17.9	68.1
1994–95	12.1	96.4
1995–96	12.3	94.5²
1996–97	9.3	111.9³
1997–98	6.8	120.7
1998–99	5.9	120.3⁴
1999–2000	7.9	49.6⁵
2000–01	9.7	62.0
2001–02	13.6	85.5
¹ This column sets out payments from the DTI's new and renewable energy R&D programme. In addition, some relevant projects will have been funded by research councils.
² The reduction in levy funding compared to the previous year was primarily due to a fall in generated output for hydro (46 per cent, reduction) and wind (20 per cent, reduction) caused by mild weather and drought conditions during 1995–96.
³ Figures from 1996–97 on include payments from the fossil fuel levy (Scotland) which commenced in that year.
⁴ The reduction was due to the effect of termination of NFFO 1 and 2 contracts on 31 December 1998.
⁵ The significant reduction was due to the full-year impact of the termination of NFFO 1 and 2 contracts.