As stated in the recently-published Energy White Paper, the Government are committed to reducing carbon dioxide emissions from heat. Many current policies contribute to reducing carbon dioxide emissions from heat—for example the EU ETS, the climate change levy, tax incentives for CHP and the Energy Efficiency Commitment. In addition, policies such as the Warm Front programme to tackle fuel poverty help to reduce emissions.
The Government published a Biomass Strategy alongside the Energy White Paper. The strategy provides a framework for the development of biomass, including its application to combined heat and power. The Government are currently also consulting on proposals to band the Renewables Obligation. The proposals contain mechanisms which are designed to encourage biomass CHP.
The Government recognise the value of considering the heat sector in a holistic and focused way. Further work is therefore being carried out into the policy options available to reduce the carbon impact of heat and its use. The work examines the full range of policy options, including the range of existing policy mechanisms such as the EU ETS.
The Government recognise that Combined Heat and Power has an important role to play alongside other low carbon technologies. However, the market is best placed to decide which technologies are most effective in supplying the UK’s energy while also meeting our carbon reduction goals. It will be for the proposers of Eco Towns to bring forward their ideas on how heating and electricity generation can be supplied from renewable sources, including combined heat and power and associated heat grids as appropriate. These will be assessed against Government policies for promoting renewable and decentralised energy supply. My hon. Friend the Minister for Housing, will shortly be publishing a prospectus for Eco Towns setting out the growth expectations for sourcing heat and power use from renewable energy.