How the money is allocated depends on a study being undertaken by the government's Performance and Innovation Unit (PIU). Last year Blair commissioned the PIU -- which reports direct to him via the cabinet secretary -- to examine the future of renewable energy with a view to greatly increasing the government's long term investment. The Department of Trade and Industry (DTI) is one of the bodies advising the PIU in drawing up its report.
According to the DTI's John Doddrell, "a bit of blue sky thinking" is needed to decide where the money will go. This suggests that research and development (R&D) and longer term technologies, such as wave, will also benefit. Doddrell explains that the £100 million is "all new money coming from several different pots." These are the Treasury's Capital and Modernisation Fund, the DTI and the Performance and Innovation Fund.
One of the most significant aspects of Blair's announcement on March 6 at a World Wildlife Fund (WWF) event is his apparent new-found commitment to renewables. Despite Labour's pledges to put the environment at the heart of government, this was only the second major speech by Blair on the environment, the first being less than five months previously. Robert Napier of WWF-UK remarks that the "very different" sort of speech signals that the government is prepared to take meaningful action on the environment. "WWF hopes the new money announced for renewables is just the first stage of a series of measures to come from government, to turn the Prime Minister's personal commitment into reality," says Napier.
Just days after Blair's £100 million pledge, energy minister Peter Hain unveiled a further £55.5 million for the DTI's renewables R&D program. Spread over three years, it is for wind, hydro, solar, biofuels and new technologies such as fuel cells. This latest cash handout brings government support for renewables to over £250 million over three years. Hain also revealed that £10 million in the form of capital grants will go to offshore wind from a total £50 million lottery funding announced in October. The lion's share of the lottery money -- £33 million -- will go to energy crops, £3 million is for small scale biomass heating and CHP. The remaining £4 million allows the New Opportunities Fund, which distributes lottery money to sport, health and the environment, flexibility in responding to proposals from prospective recipients.
Hain says the money emphasises the government's commitment to bringing green energy into the mainstream to help industry meet its target of supplying 10% of UK electricity from renewables by 2010. The "substantial injection" of capital grants for offshore wind and energy crops will help companies fund the cost of plant construction, he adds. "The government is determined to bring offshore wind and energy crops projects from the demonstration stage into full commercial development."