§ Mr. Simon ThomasTo ask the Secretary of State for Trade and Industry what action the Government have taken to provide incentives for research and investment into alternative environmentally friendly fuels. [160911]
§ Mr. HainThe proposed Renewables Obligation will require all licensed electricity suppliers to supply a specified proportion of their electricity from renewable sources. Based on current proposals, the Obligation will provide up to £600 million by 2010 as an incentive to the renewable energy industry.
Exemption of renewable energy from the Climate Change Levy is expected to be worth about £160 million per year by 2010.
Continuing support for renewables through the Non Fossil Fuel Obligation (NFFO) arrangements, which we propose to make more flexible, could rise to around £150 million per year.
The Government have announced further funding for renewables research, development and deployment in excess of £250 million over the next three years. This includes £89 million for capital grants for offshore wind, energy crops and biomass power generation, £55.5 million for an expanded DTI R&D programme, £12 million from MAFF for their energy crops planting scheme and an initial £10 million as the first phase of a market stimulation programme for solar photovoltaic roofs. It also includes £100 million to be allocated later in the year in the light of recommendations of the Cabinet Office's Performance and Innovation Unit.
With regard to incentives for alternative transport fuels, the Powershift Programme, which is sponsored by DETR, provides grants towards the additional costs of buying gas and electric vehicles. The Government have also 308W introduced a range of fiscal incentives to encourage the wider use of cleaner fuels including lower levels of fuel duty on road gas fuels.