Renew On Line (UK) 64

11. UK funding for sustainable energy

In response to a Parliamentry Question back in June, Energy Minister Malcolm Wicks laid out the governments record so far on measures to encourage the use of cleaner and more efficient sources of energy such as renewables, CHP, and carbon abatement technologies, as follows:
‘The Government’s key mechanism for encouraging renewable generation is the Renewables Obligation (RO) which places an obligation on electricity suppliers to source a specific and annually increasing percentage of their sales from eligible renewable sources. This is set at 6.7% for 2006-07 and will rise to 15.4%. by 2015-16. The RO together with the Climate Change Levy will be worth up to £l bn per year by 2010.’

He added that, since 2002, the Government have also made available around £500 million of direct funding for emerging renewable and low carbon technologies in the form of capital grants. This included:

*£117m in capital grants for round one offshore wind farms;
* £6 m for biomass capital grants;
* £80m for Low Carbon Buildings Programme;
* £50m Demonstration Fund for Carbon
Abatement Technologies, Hydrogen & Fuel Cells;
* £12.5m for the Clear Skies Programme;
* £50m for Marine Renewables Deployment Fund;
* £19m a year for industry-led R&D.

He went on ‘With regard to Combined Heat and Power (CHP) the Government have added support measures for CHP in the new Climate Change Programme, including a commitment that CHP will be fully considered in the UK's Phase II National Allocation Plan of the EU Emissions Trading Scheme. CHP can increase the overall efficiency of fuel utilisation to more than 75% compared with up to 50 % from modern Combined Cycle Gas Turbines. We are also considering whether we can offer support for CHP under the current Energy Review.’

He noted that ‘in 2005 the Government launched the Carbon Abatement Technologies Strategy and the UK’s Strategic Framework for Hydrogen Energy. Carbon Abatement Technologies (CAT’s) have the potential to significantly lower carbon dioxide emissions by 85% or more and will enable the cleaner use of coal and allow it to have a role in a sustainable world. The use of hydrogen as a transport fuel could provide significant cost-competitive CO2 reductions by 2030. These strategies includes (as listed above) funding for demonstration of hydrogen, fuel cell, and carbon abatement technologies, (including Cleaner Coal and Carbon Capture and Storage).’

He concluded ‘The EU Emissions Trading scheme covers electricity generation and energy intensive industry and requires an allowance to be produced for every tonne of carbon dioxide emitted. These allowances are tradable across the EU and will effectively require companies to incorporate the cost of carbon into decision making. This scheme should therefore provide another incentive to invest in cleaner and more efficient sources of energy.’ (Hansard, 21/6/6: Column 1880W)