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Volume 472: debated on Tuesday 4 March 2008

To ask the Secretary of State for Business, Enterprise and Regulatory Reform (1) what consideration he has given to the future use of alternative, non-renewable energy sources; and if he will make a statement; (187666)

(2) what recent discussions he has had with (a) scientific advisers and (b) industry representatives on the future use of alternative, non-renewable energy sources;

(3) whether any grants from the public purse in support of work on alternative energy sources are also available to non-renewable energy sources.

The UK needs a diverse mix of low-carbon energy sources to contribute to our energy and climate change goals. The Energy White Paper set out the Government’s policy to tackling our key challenges and the guiding principle of market access to all the options available so we can have a diverse and increasingly low carbon energy mix, enabling us to respond to the rapidly changing challenges we will face in the future.

The challenge of moving towards a lower carbon economy requires us to develop a portfolio of low carbon energy technologies such as carbon abatement technologies, including carbon capture and storage, hydrogen and fuel cells, nuclear power and renewables. On 19 November 2007, the Prime Minister announced the launch of the Government competition for a full- scale demonstration of carbon capture and storage technologies on a coal-fired power plant and on 10 January my right hon. Friend the Secretary of State invited companies to present proposals to build new nuclear power stations.

Public-sector funding for low carbon technology innovation is being delivered through the Research Councils, the Technology Strategy Board, the Energy Technologies Institute and from April the Environmental Transformation Fund. These bodies work closely together to ensure that funding activities are complementary and together effectively support a portfolio of technologies, including alternatives such as hydrogen and nuclear power.

BERR engages with external stakeholders such as the Energy Research Partnership (ERP), the Advisory Committee on Carbon Abatement Technologies (ACCAT), the Renewables Advisory Board (RAB), and the Business Council for Sustainable Energy (UKBCSE) which include scientific and industry representatives, on the delivery of these activities. The Secretary of State, in the course of his official engagements, regularly meets representatives from energy companies as well as other stakeholders.

To ask the Secretary of State for Business, Enterprise and Regulatory Reform what steps he plans to take to (a) encourage the development of wind farms and other renewable energy plants and (b) assist energy companies to reduce electricity losses arising from transmission to population centres. (188763)

The information is as follows.

(a) The Renewables Obligation (RO) is the Government’s main mechanism for supporting renewable generation. We believe that it is for the market to bring forward projects which, with support from the RO, are financially viable.

Since the RO was introduced in 2002 we have seen renewable generation more than double from 1.8 per cent. in 2002 to 4.4 per cent. in 2006. Year on year we are seeing increasing amounts of capacity coming through. The first gigawatt of wind took around 14 years to become operational; the second only 20 months.

The May 2007 Energy White Paper contains proposals to band the RO to better match the level of support provided to the costs of various technologies. This will bring on a more diverse range of renewable technologies. A Government response to consultation on reform of the RO was published alongside the Energy Bill on 10 January and this is currently before the House. We are aiming to implement these changes through secondary legislation in April 2009.

On 10 December 2007 the Secretary of State announced the launch of a Strategic Environmental Assessment (SEA) on a draft plan for up to 25 gigawatts of new offshore wind development rights in UK waters.

We also published a Scoping Report on 10 December for our draft plan for offshore energy. This is the first formal step in the consultation process. Following our consultation on this scoping stage, we will undertake a full assessment this year of our Plan for Offshore development. Following the results of the SEA, the Secretary of State expects to make decisions on whether to proceed with our plan in early 2009.

We are aware that there are barriers to the deployment of renewables in the UK—such as planning, grid and aviation/radar issues—and we are taking steps to address these. This includes taking the Planning Bill through Parliament in order to reform the planning system for renewables. We are also working with Ofgem, national grid, the Ministry of Defence and others to reduce other barriers to renewables deployment.

Later this year the Government will launch a consultation on what more we should do to increase renewable energy use in the UK to meet our share of the EU 2020 renewable energy target. This will consider a range of issues, including how to remove the barriers to development of renewable energy generation. Once the EU Renewables Directive is agreed and the UK’s contribution to the EU 2020 target is finalised, we will publish our full UK Renewable Energy Strategy in 2009.

(b) Transmission and distribution companies both have a financial incentive to reduce energy losses. In terms of the distribution companies, Ofgem is intending to review this as part of the Distribution Price Control Review which is now getting under way.

In addition, Ofgem is currently considering mechanisms for charging for transmission energy losses, in order to ensure that locational signals are taken into account in the siting and operation of generating stations.