Select Committee on Environmental Audit Appendices to the Minutes of Evidence


Letter and memorandum to the Clerk of The Committee from The Senior Vice President of TXU Energy Regulation Services

  I attach TXU's supplementary memorandum which we should like the Committee to consider in connection with the above inquiry.

  TXU has a three-pronged strategy to meet our own ROCs quota and to encourage the development of the renewables sector in the UK. This strategy reflects TXU's strengths as well as recognising and playing to the expertise of independent renewables developers.

  The three "prongs" of TXU's renewables strategy are:

    —  Build—TXU is retaining its in-house capacity to develop and operate renewables in its own right, and with partner companies, such as: off-shore wind, on-shore wind, biosolids and sustainable energy from waste.

    —  Buy—This involves the purchase of output and ROCs from independent renewables developers. The provision of Power Purchase Agreements, and the route to market which TXU can provide through its Trading business, will enable developers to secure project finance and avoid price risk under NETA's balancing market.

    —  Trade—TXU will take a lead in the developing market for trading ROCs.

  Sustainability is one of the key planks of our business. Our strategy is an inclusive one that will promote the growth of the renewables sector in the UK as a whole at the same time as helping us to meet our targets under the Renewables Obligation.

  Our memorandum sets out to cover, in turn, the four key issues on which the Committee has invited supplementary input, viz:

    —  The impact of recent developments in energy policy such as the New Electricity Trading Arrangements and the Renewables Obligation.

    —  Current policies to support renewables (including R&D and capital grants) and the likelihood of meeting Government targets in this area.

    —  The extent to which current developments reflect "joined-up" working between the parties involved (Government departments, OFGEM, etc).

    —  The outcome of the PIU Energy Review and the development of a sustainable energy strategy.

  I hope that Members of the Committee find our submission helpful.

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