Supplementary memorandum from the Renewable
Power Association
Thank you for the opportunity to present the
Renewable Power Association's views to the Committee. With respect
to the two issues on which you requested further details:
BIOMASS CAPITAL
GRANTS
A number of grant awards have been announced
by the DTI for capital support to biomass projects. In the large
scale electricity generation and combined heat and power category,
11 grants have been awarded totalling £63.5 million.
We are not aware that any of these projects
have yet progressed to the construction phase. Many are known
to be struggling to find the balance of the funding required,
because of the other issues we brought to the Committee's attention,
particularly:
— General finance ability of renewables
in light of the `political risks' associated with the Renewables
Obligation,
— Lack of an established energy crop
fuel chain able to deliver to the generator reliably and economically,
and
— The need for interim financial support
for this fuel supply to make it competitive with other sources.
The awarding of these grants should not, therefore,
be taken as evidence of material progress in the sector. In fact
funds allocated may not be taken up thereby delaying, rather than
advancing, the installation of renewable generating capacity.
SUPPORT FOR
FUEL PROCESSING
The Bio-Energy Infrastructure Scheme was intended
to provide grant funding for processing groups and fuel suppliers
to provide specification fuel to end users. Unfortunately the
proposed scheme has been delayed by a number of questions from
the EU and these will not be answered until early January 2004
so the scheme will not be open to application until spring 2004,
at the earliest. Allowing for application processing time, successful
bidders would not now be able to realise projects much before
the end of next year. The scheme was intended to take effect from
this summer.
15 September 2003
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