HC Deb 23 March 2004 vol 419 cc734-5W
Mr. Sheerman

To ask the Secretary of State for Trade and Industry what(a) portfolio quotas and (b) incentive tariffs are available to encourage greater use and supply of renewable energy in the UK. [162047]

Mr. Timms

The Renewables Obligation, introduced with effect from 1 April 2002, provides a substantial market incentive for all eligible forms of renewable energy.

The Obligation requires licensed electricity suppliers to source specified percentages of the electricity that they supply from renewable sources. The level of the Obligation is set to increase each year from its current level of 4.3 per cent. for 2003–4 to reach 10.4 per cent. for 2010–11. In December, I announced the Government's intention to provide for the level of the Obligation to continue to rise in years beyond 2010–11 so that it would reach 15.4 per cent. for 2015–16.

Before the introduction of the Renewables Obligation, the Government considered the possibility of introducing a banded Obligation, with the buy-out price set at different levels for different renewable sources of energy. This possibility was rejected, as it was judged that it would segment the market unnecessarily, and would lead to the Government dictating the relative importance of each technology.

Failure to reach the specified percentages exposes suppliers to a buy-out price currently set at 3,051 pence per KWh for each unit not sourced from renewables.

It is open to suppliers to offer "green tariffs" of various kinds to their customers, some of which may go beyond the requirements of the Renewables Obligation in terms of support for renewables.

Mr. Sheerman

To ask the Secretary of State for Trade and Industry what steps her Department is taking to lower incentives on the(a) development, (b) sale and (c) use of environmentally unfriendly energy technologies. [162048]

Mr. Timms

The department works with others to develop a range of measures designed to disincentivise environmentally unfriendly energy technologies. These includeregulatory instruments—like the implementation of the Large Combustion Plant Directive; economic instruments—like the forthcoming EU Emissions Trading Scheme; the production of guidance—such as the guidance we publish for developers seeking consent for large power stations on the need to consider opportunities for Combined Heat and Power.

In addition, of course, we have developed a wide range of incentives for environmentally friendly sources of energy, for example the Renewables Obligation which provides an incentive for the use of renewable energy sources to generate electricity.