Renewable Energy (Hansard, 19 October 2001)

§ Mr. Wilson

The Department is taking a wide range of measures to promote the construction and development of renewable energy sources. The new Renewables Obligation and associated Renewables Obligation Scotland will oblige all licensed electricity suppliers in Great Britain to supply a specified and growing proportion of their electricity from renewable sources. The obligation will create a long-term market for renewables which will be worth over £1 billion per year by 2010.

The obligation will be the main mechanism through which we meet our renewables targets, and will be underpinned by direct Government funding worth over £260 million between 2001 and 2004. This will support a number of measures including my Department's £55.5 million R&D programme, and an extensive capital grants programme. An announcement will be made shortly on the detailed allocation of the £100 million for renewables announced by the Prime Minister in March this year.

(a) Wave: it was recently announced that my Department is providing further support to bring our funding for Wavegen's latest wave energy project to almost £1.67 million. This funding will assist with the further development of their new offshore wave energy concept and the construction and testing at sea of a prototype. This substantial funding confirms the Government's commitment to their new wave energy programme.
(b) Solar: in February this year in the Enterprise, Skills and Innovation White Paper, my right hon. Friend the Secretary of State for Trade and Industry announced a major PV demonstration programme. The Department is giving £10 million to the first phase of this programme. The focus of this programme will be on social housing as well as public buildings. Meanwhile we have had two rounds of our Domestic PV Field Trial with a budget of £4 million.
(c) Hydro Electric power generation has played an important part in our overall renewables policy and will continue to do so. My recent announcement that refurbished hydro between 10 and 20 MW will qualify for the obligation is expected to lead to refurbishment of 30 hydroelectric stations and to company investment of over £250 million. This source of electricity will also benefit from the fact that all newly built hydroelectric stations, regardless of size, will receive support from the obligation.
(d) Offshore wind will benefit from a programme of capital grants worth at least £49 million. This will support early deployment of a number of demonstration projects and will provide a bank of knowledge and expertise to maximise the contribution of these two technologies to the UK's 10 per cent. target. We have also recently consulted on the offshore consents process, and plan to bring forward a new "one-stop-shop" approach which should make it easier for project developers to get their projects up and running.
(e) These and other resources could also benefit substantially from the £100 million announced by the Prime Minister earlier this year. In addition, in England, £12 million is available from DEFRA for energy crop planting grants, while the New Opportunities Fund has set aside at least £33 million for capital grants for this technology on a UK-wide basis. At least £3 million will be available to support small scale biomass heat projects. The obligation and associated funding will also 1374W support deployment of other renewables resources such as tidal power, and the advanced technologies of gasification, pyrolysis and anaerobic digestion.