§ Dr. KumarTo ask the Secretary of State for Trade and Industry in what way the climate change levy will promote the efficient generation of electricity; and if he will make a statement. [88200]
§ Mr. BattleThe proposed climate change levy will be levied downstream on energy supplied to industrial and commercial users. This will ensure that domestic consumption of energy is excluded. Since it is a downstream tax there will be relatively little impact on the mix of fuels used, and efficiency, in generation.
However, the Government are looking closely at the possibility of exempting new forms of renewable energy, like wind power, from the levy. The consultation document issued by Customs and Excise sought views on whether, and if so, how this could be done. The treatment of Combined Heat and Power plants is also being considered. In addition, the Government have announced that there will be an extra £50 million a year for schemes aimed at promoting energy efficiency and additional support for renewables.
Finally, the White Paper, "Conclusions of the Review of Energy Sources for Power Generation", sets out the Government's broad energy policy, including radical reforms to the electricity market. These reforms will bring greater competition to electricity generation and lower prices for consumers.