§ Mr. LidingtonTo ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the time scale for stage 2 of the feasibility assessments for combined heat and power under the terms of climate change agreements. [32309]
§ Mr. Meacher[holding answer 1 February 2002]: Climate change agreements set eligible operators challenging targets to reduce their energy use in return for an 80 per cent. reduction in the level of climate change levy on that energy use. A move to use more energy efficient combined heat and power (CHP) installations is one way in which operators can meet their targets. The targets for most facilities have taken into account any contribution that CHP installations can make. However, in some sectors not enough was known about the technical and economic feasibility of combined heat and power in their processes. In these cases the agreements provided for an assessment of the feasibility over the first 18 months of 748W the agreements, with a view to revising targets for those installations in which CHP could make a significant, cost effective contribution, by the third milestone ie 2007.
The first stage in the assessment was completed in November 2001 and the second was due to be completed by 4 January. However, current conditions in the energy markets have not helped the economic case for CHP and there have also been delays in obtaining data with which to set the tests. Consequently, stage 2 has been deferred. This will also allow the procedure's design to take account of developments resulting from the Government's draft CHP Strategy and DTI's consultation on the Impact of NETA on Smaller Generators, both of which will be published shortly.
A decision on the revised timetable for the assessment will be made over the coming months but it will not delay the re-negotiation of targets for the third milestone as originally intended.