§ Dr. Michael ClarkTo ask the President of the Board of Trade (1) what steps are being taken to quantify the market price of electricity to which renewables are expected to converge under the NFFO programme;
(2) what steps are being taken to ensure that projects which are offered power purchase agreements under the NFFO programme have had cash flow forecasts certified as financeable by a reputable organisation;
(3) what steps are being taken under the NFFO programme, to provide an initial market for new and renewable technologies awaiting demonstration in Britain;
(4) what steps are being taken to provide wood with a separate technology band within which to bid under the NFFO programme.
§ Mr. Charles WardleRenewable energy non-fossil fuel obligation orders for England and Wales have been laid before Parliament in 1990, 1991 and 1994, in order to facilitate an initial market for those renewable energy technologies which are both technically robust and can be deployed at a cost which, with the benefits of experience under successive NFFO orders, can be expected to converge towards the market price for electricity. The obligations under these NFFO orders were set at 103 MW, 457 MW and 627 MW respectively, that is, a total of 1186 MW, convering hydro, large and small-scale wind projects, sewage gas, landfill gas, municipal and industrial waste, energy crops and agricultural and forestry wastes.
However, a proportion of the contracts made to meet the obligations under the orders are not expected to go forward to commissioning, for reasons such as failure to secure planning permission or project finance. As a 610W consequence, the level of the relevant obligation will be reduced by an amount corresponding to the capacity of the projects terminated.
The Government are working towards 1,500 MW of new renewables-based generation capacity in the UK by 2000, mainly through NFFO-type arrangements.
Specific provision was made under the third renewables order, requiring the regional electricity companies in England and Wales to secure capacity based on gasification by partial combustion of energy crops and agriculture waste. Three projects with an aggregate capacity of 19 MW were awarded contracts, each of which is expected to use wood grown specifically as a fuel.
Over the next few months, the Government will be considering the possible size, shape and timing of the prospective fourth renewables order for England and Wales, taking account of representations made to them, including those on the market price for electricity from renewable sources, technology banding and the specific issue of an obligation for wood grown as a fuel. That fourth renewables order would be expected to be laid before Parliament in 1996, with a fifth order in prospect for 1998.
Judgment of the commercial viability of individual projects is a matter for the Director General of Electricity Supply.