The UK Government's Comprehensive Spending Review October 2007 - Resourcing, CHP and Biofuels
The waste management sector did well in the review gaining an extra £2bn in Private Finance Initiative credits available between now and 2011 to help fund new facilities. The Nuclear Decommissioning Authority was handed more money, and the development of renewable energy technologies was backed to the tune of £370M during the three years between 2008/9 and 2010/11, as covered by the latest CSR.
This is great news for technologies such as Anaerobic Digestion, but British construction's heavy workload and lack of resources are may combine and push tender prices up at a pace that the public purse will be unable to keep up with, especially if energy prices fall in a recession.
Here are various excerpts from the 2007 Pre-Budget Report and Comprehensive Spending Review October 2007, to give a flavour of the encouragement now being given to the renewable energy sector which will now also benefit Anaerobic Digestion.
Don't forget that the Energy White Paper published by the UK Government in Spring 2008, and now incorporated into the Climate Change bill, also proposes improved ROCs and a new feed-in Tarrif for Anaerobic Digestion processes.
The following are excerpts from the report presented to Parliament by the Chancellor of the Exchequer by Command of Her Majesty in October 2007.
We suggest that you visit the BBC site which contains many links to resources in this area.
In the Spring of 2007, the European Council agreed an ambitious package of climate change and energy measures. The EU committed to reduce greenhouse gas emissions by 20 per cent by 2020, compared with 1990 levels, or by 30 per cent as part of a wider international agreement, and reaffirmed the central role that emissions trading must play in achieving these long-term goals.
The European Council also agreed a target of 20 per cent renewable energy in overall EU consumption by 2020. The UK Government is working with the Commission and other Member States to ensure that policies are effective in achieving the EU’s greenhouse gas objectives, and that they provide a credible path to cost-effective delivery, in line with the Stern Review’s recommendations.
The CSR also highlighted the following:-
Combined heat and power
“Combined heat and power (CHP) is the simultaneous generation of usable heat and power (usually electricity) in a single process. CHP is a more efficient way to use both fossil and renewable fuels and can be employed over a wide range of sizes, applications, fuels and technologies. The Government will aim to ensure that arrangements for future phases of the EU ETS continue to recognise the carbon savings that CHP delivers.”
The Government provides support for microgeneration through:
- “the Low Carbon Buildings Programme;
- reduced VAT on installations;
- access to Renewable Obligation Certificates;
- and tax exemptions for revenues earned from domestically generated electricity exported to the grid.
The installation of microgeneration equipment in business premises can trigger an increased liability for business rates. Subject to state aid clearance, the Government will therefore not include microgeneration investments in ad hoc re-assessments of business rates liability from 2008. Such investments will now only be taken into account at the five-year re-valuation of business rates, providing up to five years worth of benefit to rate payers.”
“The Renewable Transport Fuel Obligation (RTFO) will become the principal mechanism for encouraging the development of biofuels, leading to a significant reduction in emissions of greenhouse gases from the transport sector, by increasing the use of biofuels. The total net carbon savings associated were initially estimated to be in the region of 3.6 MtCO2 per year by 2010.
In June this year, the Government announced that from 2010 the RTFO would reward biofuels according to the carbon that they save. In addition, from 2011, the RTFO will also reward only biofuels that meet appropriate sustainability standards. These aims will enhance the environmental focus of the RTFO, directly benefiting those who produce and sell the most sustainable biofuels. With its additional environmental focus, the Government continues to believe that the RTFO will be the most effective mechanism for encouraging the use of biofuels. The Government has today laid in Parliament the draft RTFO Order to prepare for the introduction of the RTFO in April 2008.
The RTFO will provide all biofuel producers with a valuable incentive to produce the cleanest sustainable biofuels. The Government has been pursuing state aid clearance for an enhanced capital allowance (ECA) for the cleanest biofuel plant. However, it has become clear that in order to make it compliant, it would offer little value to the limited number of businesses who would be eligible whilst introducing considerable administrative complexity and uncertainty. As such, the Government has decided to focus on ensuring that the RTFO encourages the production of the cleanest and most sustainable biofuels, and will therefore
not pursue state aid clearance for the proposed ECA. Biofuels producers can still seek financial assistance to ensure cleaner fuel production through investing in good quality CHP installations, which are eligible under the existing ECA scheme.
In addition, building on the package of measures announced in Budget 2007, the Government will extend the current duty incentive for biofuels to biobutanol on a pilot basis, with the aim of assessing its environmental benefits and performance as a transport fuel.”