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Renewable Energy Policy

Volume 407: debated on Tuesday 24 June 2003

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To ask the Secretary of State for Trade and Industry (1) what comparative studies her Department has undertaken with other European countries which have introduced subsidies for wood-fired power stations; what impact such subsidies have been seen to have had on the availability of wood for other purposes; and if she will make a statement; [119178](2) what assessment her Department has made of the impact of the Government's renewable energy policy on UK wood panel manufacturers; [119179](3) what assessment her Department has made of the impact on the availability of wood suitable for products of subsidies paid to electricity suppliers in the form of renewable obligation certificates. [119180]

The Renewables Obligation is the main instrument put in place by Government to promote the development of renewable forms of energy in the UK. The obligation is intended to provide an impetus for new generating capacity that will be required to meet our current targets for renewable energy set in the Energy White Paper and as a basis for further reductions in carbon dioxide emissions under Kyoto.My officials are facilitating work between representatives of the UK wood industry and co-firing power stations to explore the opportunities offered by co-firing under the obligation for UK forestry, and, in particular, the potential for using byproducts from existing wood industries. It is hoped that this initiative, if successful, will have the dual benefit of reducing imports and making more biomass available for a larger market in the UK, thereby helping to stabilise prices. We understand from the forestry industry that it can meet demand from power generators from existing surplus forestry material. My officials are obtaining further information on the availability of forestry material used by power generators and wood panel manufacturers.In addition, we are currently reviewing the co-firing rules under the obligation with a view to encouraging stronger take-up of energy crops by farmers which should, in time, relieve any pressure on forestry material.

To ask the Secretary of State for Trade and Industry what subsidies are available to the energy industry for (a) the incineration of biomass renewable fuels and (b) capital equipment such as wood fired generators; and how much these subsidies are estimated to amount to in terms of £ per ton of wood incinerated in power stations. [119182]

Capital Grants have recently been awarded to projects throughout the UK to construct biomass-fuelled heat and power generation plant. The scheme, jointly run by DTI and the New Opportunities Fund, is worth £66 million and will support the capital costs of projects. These funds have been fully allocated. Projects funded under the scheme are expected to use appropriate biomass fuels such as short rotation coppice and forestry wood fuels as the majority fuel source.We do not collect information on the amount of subsidy in terms of tonnage of feedstock. Any estimates would be subject to a significant number of variables e.g. moisture, fuel source and efficiency.