HC Deb 27 November 2003 vol 415 cc451-2W
Mr. Bellingham

To ask the Secretary of State for Trade and Industry what plans she has to change the targets for the purchase of renewable energy by UK companies. [142130]

Mr. Timms

The Government have set a target that, by 2010, 10 per cent. of sales from licensed electricity suppliers should come from renewable sourced electricity. There are no plans to change this target.

The Renewables Obligation, enforced under the Renewables Obligation Order 2002 in England and Wales, and the Renewables Obligation (Scotland) Order 2002, is the main mechanism which the Government have introduced to help achieve the growth necessary to reach this target. The Obligation will remain in place until 2027, and licensed electricity suppliers are required to supply a specified and growing proportion of their sales from renewable sourced electricity each year. The level of the Obligation was 3 per cent. in its first year of operation, and now stands at 4.3 per cent. and is set to rise to 10.4 per cent. in the 2010–11 period.

The Government have recently announced their intention to bring forward proposals to raise the levels of the Obligation for the years beyond 2010–11, by further annual increases, reaching 15.4 per cent. in the 2015–16 period. This is a further sign of our commitment to developing the renewables industry.

Mr. Bellingham

To ask the Secretary of State for Trade and Industry what proportion of companies have met their targets for the purchase of renewable energy in the last 12 months. [142147]

Mr. Timms

Under the terms of the Renewables Obligation Order (2002), and the Renewables Obligation (Scotland) Order 2002, licensed electricity suppliers in Great Britain are required to supply specific proportions of their electricity sales from renewable sourced electricity—with the aim of reaching the target of 10.4 per cent. in the period 2010–11.

For the year to April 2003, the level of the Obligation was set at 3 per cent. (The current level is 4.3 per cent.). Suppliers demonstrate their compliance with the Obligation through presenting Renewables Obligation Certificates (ROCs) to Ofgem. If they do not present ROCs in this way, they must buy out all or part of their obligation target. Payments made to this buyout fund are then subsequently recycled to those suppliers who have demonstrated their compliance through the ROC mechanism.

The proportions of suppliers meeting their obligations through (1) complete fulfilment and (2) partial fulfilment are shown in the tables.

Suppliers and the 3 per cent. Renewables Target in England and

Wales (Renewables Obligation)

Number Percentage
Suppliers reaching 3 per cent, target 12 31
Suppliers partially meeting 3 per cent, target 11 29
Suppliers failing to meet any of 3 per cent, target 14 40

Suppliers and the 3 per cent. Renewables Target in England and Wales

(Renewables Obligation)

Number Percentage
Suppliers reaching 3 per cent, target 15 54
Suppliers partially meeting 3 per cent. target 4 14
Suppliers failing to meet any of 3 per cent. target 9 32

Taking all licensed electricity suppliers in Great Britain together, the proportion of the Renewables Obligation met by the actual supply of renewables in 2002–03 was 58.9 per cent.

Mr. Bellingham

To ask the Secretary of State for Trade and Industry what estimate she has made of the cost to UK companies of meeting current targets for the purchase of renewable energy. [142148]

Mr. Timms

The costs of the Renewables Obligation, the Government's main policy instrument for the achievement of our 10 per cent. renewable energy target for 2010, are expected to be passed on by electricity supply companies to electricity consumers across the industrial, commercial and domestic sectors. The Government estimates that, by 2010–11, the impact of the Renewables Obligation on electricity prices will be the equivalent of an average increase of 4.9 per cent. in real terms over actual 1999 prices.