§ Fiona MactaggartTo ask the Secretary of State for Trade and Industry what action she will take to support158W environmentally friendly small generators following the introduction of NETA; and if she plans to take this action before the next Budget. [26614]
§ Mr. WilsonThe new Renewables Obligation, to come into effect this year, together with exemption of renewables from the climate change Levy and continuing support under the non-fossil fuel obligation, will create a long-term market incentive for renewables expected to be worth over £1 billion per year by 2010.
This will be underpinned by direct Government funding for renewables worth over £260 million between 2001 and 2004 including an extensive capital grants programme for the early development of offshore wind and energy crops, the initial stage of a major photovoltaics demonstration programme and a boost for research and development.
In addition, on 1 November 2001 we published a consultation document in response to Ofgem's reports on NETA and its impact on smaller generators, including renewables and combined heat and power (CHP). Consultation closed on 1 December and follow-up work to analyse responses and take appropriate action is now under way. On 20 December I announced the formation of a working group to look at obstacles to consolidation under NETA, and to report to DTI by 31 January 2002. The Government will be publishing a response to their consultation shortly.
In addition, DEFRA are planning to issue their CHP Strategy shortly and that this will seek views on the measures needed to support the development of CHP. The Government also announced in their pre-Budget report that they will consider the environmental case for providing more favourable treatment for CHP within the climate change levy.