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Volume 957: debated on Thursday 9 November 1978

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asked the Secretary of State for Energy what are the detailed arrangements for the United Kingdom energy conservation demonstration projects programme.

The Department of Energy is today publishing Energy Paper No. 32—"Energy Conservation Research, Development and Demonstration—an initial strategy for industry". This sets out the criteria and detailed arrangements for the Government's programme to demonstrate to industry the benefits of novel applications of existing or improved technology.

Initially, the Government propose to place emphasis on saving energy at the point of use and on improved process efficiency. Six technologies and six industrial sectors have been identified for priority attention. One objective is to achieve an annual energy saving worth at least £5 for each £1 of Government sup port.

Government assistance for demonstration projects will combine the traditional shared-cost contract type of arrangement used for R & D projects with the provision of grants. In the case of users of the technology to be demonstrated grant aid will be the norm but it is expected that manufacturers of the project equipment will often prefer the shared cost arrangement.

Grant aid to users will usually take the form of a Government contribution of up to 25 per cent. of the capital cost of the plant or equipment and its installation. In addition, financial assistance of up to 100 per cent. will be available to cover the installation and operation of monitoring or other special ancillary equipment required for demonstration or testing purposes. In the case of the manufacturer who has the prospect of increased sales of plant or equipment if the demonstration project is successful assistance will generally be provided by means of shared cost arrangements—normally 50 per cent. Over £20 million is available for demonstration projects under the Government's scheme and I hope that companies will take full advantage of the opportunity for demonstrating the benefits, in the forms of energy and cost saving, of improved or adapted technology.