Renewable energy to make up 10% of UK supply within a decade

In order to achieve this target (see related story), Energy Minister Helen Liddell announced that the Utilities Bill will require all electricity suppliers to provide a minimum proportion of their power from renewable electricity. The bill will also make renewable power and heat generating companies exempt from paying the Climate Change Levy (CCL) – a tax on the business use of energy, with offsetting cuts in employers’ National Insurance contributions, due to be introduced in April 2001 (see related story). This, it is hoped, will enable renewables to compete with conventional sources of power.

The Utilities Bill – now receiving its second reading in the House of Commons – also contains provisions for an expanded support programme for new and renewable energy plus the development of a strategic approach to planning, intended to end the planning controversy surrounding some forms of renewables, such as windfarms.

The Government wants to keep electricity prices down while the 10% target is achieved. The Utilities Bill includes new Electricity Trading Arrangements, intended to lead to a 10% drop in prices for most consumers in the medium term, although business consumers paying the CCL will see a smaller reduction. Lidell said she will ask consumer bodies whether an increase of up to 2% by around 2010 (about £1.35 on a typical quarterly electricity bill) would be acceptable for financing the rise in the

Renewably-generated energy.

“Many renewable electricity generation schemes, using established technologies, are now close to producing power competitive with that generated by mainstream coal and gas plant,” Liddell said in a statement. “It’s time to make the next generation of technologies lean and mean as well as clean and green. A strong renewables industry will not only help us to protect our environment, but it will contribute the diversity and security of our energy supply.”

The Bill has been criticised by environmentalists, who say the electricity price cuts will encourage people to use more energy, resulting in increased greenhouse gas emissions, and further over-abstraction of water from rivers and important wetland sites.

John Lanchbery, RSPB climate change and energy policy officer, told edie that RSPB welcomed the 10% renewables target: “It’s a sensible target, but the longer they leave it, the more difficult it will be to achieve. There are some really good environmentally-friendly measures in the Bill, notably the provisions to place an obligation on electricity suppliers to supply a minimum proportion of renewable energy to customers. However, the provisions for price cuts and especially the new Electricity Trading Arrangements – which discourages renewables by not taking the unpredictability of some renewable energy sources into account – will unfortunately offset the good bits. Environmental concerns should be at the heart of this Bill. Instead, they are merely an add-on.”