Renew On Line (UK) 60

Extracts from NATTA's journal
Renew, issue160 March-April2006

5. NFFO fund raided

When the Renewables Obligation replaced the Non Fossil Fuel Obligation in 2002, some projects with NFFO contracts were taken in to the RO system, but the payments under this (including the value of the associated Renewable Obligation Certificates) are more than they were contracted to get from the NFFO system- so there is an extra income stream- which, as we have noted before (see Renew 157, 159), has been going to the Treasury. Elliot Morley claimed in a  Commons exchange (15/12/05) on this issue that the Treasury spent more on renewables than it took, but, so far, according to the Independent (10/12/05), it has taken £210m from the NFFO Fund, while only £60m of it has been spent on renewable energy. By 2010, the fund is expected to have raised as much as £1bn, which it said is likely to be taken by the Treasury for general spending. Former environment minister, Michael Meacher, has condemned the move as ‘perverse and illicit. The use to which this money is put should be determined by the purpose for which it was levied in the first place.’

The Independent reported that the Treasury took a first tranche of £60m in 2004, as it was allowed to do under a one-off provision in the Sustainable Energy Act 2003. However the power regulator Ofgem, which administers the fund, has revealed that on 20 September it paid a further £150m to the Treasury.  ‘Further funding was paid to Her Majesty’s Treasury under the Civil List Act 1952’, said an Ofgem spokesman. ‘As receipts of levy surplus are regarded as hereditary revenues of the Crown, it is intended that annual transfers to the Treasury will continue, in accordance with the 1952 Act’. 

That however is, it seems, a rather obscure basis for the transaction- the Independent  noted that it related mainly to revenues from Crown lands, treasure trove, fines, forfeitures and ‘prerogative rights relating to royal mines, royal fish and swans’.

The Greenpeace director, Stephen Tindale, said: ‘Money raised from consumers for renewable energy must be spent on renewables- not on general expenditure. This is enough money to make Britain the world leader in offshore wind power, and that is how we believe it should be used.’ 

Mike Childs, of Friends of the Earth, said: ‘This money has been raised for renewables and that’s how it should be spent, for example, to bring on a new generation of renewable technologies such as wave and tidal power’.

Tory Green Gurus

David Cameron, the new Conservative leader, has pledged to take the “tough decisions” needed to cut greenhouse gas emissions by 60% by 2050. He has appointed Ecologist Editor Zac Goldsmith as joint head of a new policy group looking at ‘quality of life’ issues, alongside former environment secretary John Gummer. The new policy review group is to report back next summer on how it thinks the carbon reduction target could be met.  Meanwhile, New Labours green guru, Johnathon Porritt has been challenging Blair to live up to his green rhetoric, with a damning critique of Labours record from the Sustainable Development Commission, which Porritt chairs.  See the Reviews section of Renew 160