United Kingdom

United Kingdom

Lottery grant and consumer approval -- Significant offshore support

Prime Minister Tony Blair has announced £50 million pounds of additional funding to be shared between offshore wind and energy crops. The money is to come from the New Opportunities Fund -- one of the bodies which distributes lottery profits. The new one-off grant is in addition to £13 million a year capital grants for offshore wind and energy crops from Climate Change Levy proceeds.

Speaking in London to the Confederation of British Industry and the Green Alliance, Blair said he wanted to push green issues back up the political agenda. He also announced that he has asked the Performance and Innovation Unit to undertake a comprehensive study into the future of renewable energy "with the view to increasing substantially our long term investment."

It was Blair's first major speech on the environment since coming into office over three years ago, despite his manifesto pledge to put the environment at the heart of government. In his new-found enthusiasm for environmental issues, he also pledged to attend the next Earth Summit in 2002 and to encourage other world leaders to join him.

Environmental groups who have over the past few years criticised his lack of interest in renewable energy and the environment are lukewarm in their reactions. Peter Melchett of Greenpeace calls the new investment in offshore wind a welcome first step. "But we need to see the government move much further and more quickly," he says. More enthusiastic is the British Wind Energy Association (BWEA): "We're pleased that government is backing its policy and leading the way in demonstrating that a commitment to a greener future can make economic as well as environmental sense," says the BWEA's Nick Goodall.

Price hikes okay

Meanwhile, it appears the need for renewables is being accepted not only by UK leaders, but also by consumer representatives. Consumer watchdog, the National Electricity Consumers Council (NECC), has endorsed the extra costs to electricity customers of support for renewables through the government's planned renewable energy obligation. The government expects the obligation to increase electricity prices by about 3.7% by 2010.

The NECC takes a long view of the need for renewables. Despite the increase in electricity price, environmental targets need to be met and the interests of future as well as present electricity users safeguarded, says Rodney Brooke, NECC chairman. "In the long run, consumers will gain from lower prices as the cost of producing renewable energy will reduce with improved technology. The price of diminishing reserves of gas will increase."

But he calls for transparency in billing to show the cost of the obligation on customers' bills, and states that the buy out price cap on the cost of renewables should not be increased, except in relation to the retail price index to take account of inflation.

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