Memorandum by the Department for Business
Enterprise and Regulatory Reform (BERR)
1. How do and should renewables fit into Britain's
overall energy policy? How does the UK's policy compare with the
United States, Australia, Canada, and other EU countries?
The overall objectives of our energy policy
and in international energy policy are to ensure security of supply,
sustainability and affordability of energy. We strongly believe
that we need a range of low carbon solutions to meet these challenges.
These include renewables, but also energy efficiency measures,
reducing demand, nuclear power, carbon capture and storage and
developing new technologies. We will need to develop this diverse,
low-carbon energy mix at competitive prices. We believe that the
best way to achieve this is through independently regulated markets,
with the right interventions to correct specific market failures.
We will shortly be consulting on a possible package
of measures for our Renewable Energy Strategy. In developing the
strategy we are studying the policies of other countries to learn
lessons where necessary. Our overall approach to low carbon energy
policy of developing a portfolio of solutions is in line with
the policies of our partners in Europe and the US, although individual
countries are of course giving different degrees of emphasis to
some policy areas.
Within renewable energy policy, again our
approach is line with the generally accepted principles for supporting
renewables effectively, namely to provide a policy framework that
is (i) stable, that (ii) removes barriers (such as planning and
grid), and that (iii) provides financial support to a range of
renewable technologies.
Nevertheless, we see significant differences
in the levels of renewable energy across countries. For instance:
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| UK | 1.3% of final energy consumption
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| Germany | 5.8% of final energy consumption
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| France | 10.3% of final energy consumption
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| EU average | 8.5%[1] of final energy consumption
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| USA | 4.7%[2] of total primary energy supply
|
|
By comparison, the current levels in the UK may appear
low. But we need to bear in mind that we started off from a low
base level, with very low levels of cheap hydro resource compared
to other countries. Hydro power made up about three-quarters of
the overall EU renewables level in 2005. At the same time, we
have already put in place effective renewables policies over the
past several years. They are already showing significant results,
tripling the amount of renewable electricity to around 5% since
the introduction of the Renewables Obligation.
Renewables are an important way to reduce our dependency
on fossil fuels, and as the challenges of energy security and
climate change become more pressing, we believe it is right to
give additional emphasis to renewables. We therefore now intend
to build on our existing policies to do even more for renewables.
This is why we are supporting the current proposed EU Directive
aiming at increasing the share of renewables in the EU to 20%
by 2020.
As you know we are currently considering what additional
policies may be needed to deliver the UK's share of this target.
We will consult on proposals this summer.
2. What are the barriers to greater deployment of renewable
energy? Are there technical limits to the amount of renewable
energy that the UK can absorb?
Renewable energy sources are currently more expensive than
their conventional counterparts and the levels of renewable deployment
needed to meet the EU targets cannot be reached without significant
further intervention from the Government to encourage investment
and innovation. Other important barriers to deployment are in
the areas of planning and grid access. Supply chain blockages,
for example, for key components such as wind turbines and gear
boxes also provide barriers to the greater deployment of renewable
energy. Our consultation on the Renewable Energy Strategy will
set out a raft of measures to tackle all of these barriers.
Clearly a step-change increase in renewables deployment over
the coming decade or so raises questions on how renewables will
interact with the existing energy markets. This is particularly
an issue for renewable electricity. For instance intermittency
of wind power raises questions how we can continue to make sure
that the lights stay on even when the wind isn't blowing. We are
currently looking carefully at these questions, and will present
the initial results of our analysis in our consultation this summer.
3. Are there likely to be technological advances that would
make renewable energy cheaper and viable without Government support
in the future? Should, and how could, policy be designed to promote
such technological advances?
Technological advances are likely to help bring down the
cost of building, running and maintaining existing renewable technologies
in the future. New technologies, or variants on existing technologies,
may also emerge which are significantly cheaper than existing
technologies (such as second generation solar panels). However
even mature renewable technologies are still likely to cost more
than traditional methods of power production, so a suitably designed
market framework (where sustainability is rewarded) is likely
to remain essential.
The cost of technologies can fall without any direct Government
intervention. For example, developments in the materials and components
used in wind turbines (both in terms of their performance, and
in the cost of producing them) have reduced manufacturing costs
and maintenance costs. The scale on which they are manufactured
has cut costs, and experience in operating them has led to ongoing
design improvements. Going forward, further developments such
as "direct drive" wind turbines could be simpler and
cheaper to run than current designs.
However the more innovative technologies (particularly those
which have not yet widely deployed) generally require a degree
of Government support if they are to develop to a point where
they are cost effective in a useful timeframe. The private sector
plays the major role in technology development and deployment,
and will only invest if there is a reasonable prospect of commercial
return. There are a wide range of reasons why investment in energy
technology underperforms that of other sectors, many of which
are particular to the energy sector—including the unusually
long development times involving costly full scale trials, perceived
uncertainty over future policy direction, the difficulty of protecting
the engineering-based knowledge gained in the development process,
and the cost of establishing new enabling infrastructure such
as network connections. It's also worth noting that as electricity
is a commodity product, there are few "niche markets"
for developers to secure early returns on their investments, and
energy companies have relatively little appetite for using unproven
and more costly technologies.
In order to promote such technological advances, we need
to:
— Develop appropriate pricing and "market pull"
measures (such as carbon pricing, and the use of standards)—to
increase developers' confidence in receiving a market return for
renewable technology work.
— Fund basic research, development and demonstration
of new technologies (in partnership with the private sector),
where there is less incentive for companies to invest.
— Tackle other barriers to the development and deployment
of new technologies (such as such as streamlining legal and regulatory
frameworks, ensuring reliable information on the technologies
is available, and ensuring timely network connections).
Ultimately, supporting technology development—directly
or indirectly—means investing in energy sources which may
not be cost effective in the short term, in order to accelerate
learning and cost reduction to secure economic return and wider
social benefit (in the form of cheap renewable technologies that
make the most of the UK's renewable resources) in the future.
Funding for renewable research and technology development
is provided by the Department for Innovation, Universities and
Skills through the Research Councils, Energy Technologies Institute
and Technology Strategy Board. The Councils and ETI are submitting
separate evidence to this inquiry.
4. Has Government support been effective in leading to
more renewable energy? What have been the most cost-effective
forms of support in the UK and other countries and what should
the balance be between subsidies, guaranteed prices, quotas, carbon
taxes and other forms of support? Should such support favour any
particular form of renewable energy over the others? For instance,
what are the relative merits of feed-in tariffs versus the UK's
present Renewables Obligation Certificate (ROC) regime?
The Renewables Obligation (RO) is clearly working as a financial
incentive—eligible renewable generation more than doubled
between 2002 (when the RO was introduced) and 2006, with another
18 GW of capacity in the pipeline. The first GW of wind took around
14 years to become operational (mostly under the predecessor to
the RO the Non-Fossil Fuel Obligation, and the second only 20
months. The RO has been an incentive not only for wind for example
there are significant amounts of biomass-fired generation coming
forward.
Microgeneration has also benefited from changes to the RO
accreditation process, and as a result we have seen the number
of accredited microgenerators rise from 300 to over 1000. A further
300 are waiting for accreditation. Additionally, under proposed
reforms to the RO, microgenerators will be able to claim two ROCs
for every 1MWh of renewable electricity generated from 1 April
2009.
The main barriers to the deployment of additional resources
have been in projects getting planning permission and grid connection.
Of the 18 GW of capacity in the pipeline more than 10GW are awaiting
planning consent. Success in terms of bringing forward renewables
depends not only on financial support, but also on having a stable,
reliable, long-term policy framework in place, and removing barriers
such as planning, grid and supply chain issues.
On planning, for example, the effect of wind turbines on
military and civilian radar has in a number of cases proved a
barrier to the deployment of onshore and offshore wind. In response
to this problem, the Government and the wind farm industry have
this month signed up to a landmark agreement to work together
to identify and develop technical and other solutions. This joint
Government/Industry Aviation Plan aims to remove aviation and
radar objections as a barrier to the expansion of UK wind generation
capacity. It will allow the continued and increased deployment
of turbines necessary for us to meet our climate change obligations
while allowing us to continue to operate a safe aviation airspace
and ensuring national security.
As regards renewable electricity, we currently have about
18 gigawatts of wind projects in various stages of development.
This indicates that it's essential that we are successful at tackling
planning barriers and other non-financial barriers. We are already
implementing reforms in the Planning Bill currently before Parliament,
and we are considering what more we may need to do.
Changes have also been made to remove planning barriers to
domestic microgeneration installations which have little or no
impact beyond the host property. Solar thermal and solar PV, ground
source heat pumps, biomass boilers and CHP are now permitted development;
wind turbines and air source heat pumps will be included in due
course.
Nevertheless, we also need to look carefully at our financial
support framework. Particularly as regards heat more can be done.
Our recent Call for Evidence asked what the best way of providing
financial support for heat would be, and our consultation document
this summer will propose next steps. I have also said before that
we would look at how best to support renewables at the household
level (both renewable heat and electricity), through feed-in tariffs
or otherwise.
The forthcoming consultation document will set out the initial
conclusions from the work we're currently doing on these questions,
including what additional support is required for all renewable
energy technologies.
The Energy Bill currently before Parliament is designed to
allow the RO to provide different levels of support for different
technologies (banding the RO). This is expected to make the RO
a more effective and cost-efficient mechanism. The details of
this approach are set out in the consultation document (ref) and
government response to consultation (ref).
Our decision to band was also informed by our own modelling
of the changes and associated cost benefit analysis. This work
was based on:
— an analysis and informal consultation on current
market costs of each technology. This work was undertaken on our
behalf by Ernst & Young;
— a report, giving details of the cost review findings
and those organisations consulted, was published alongside the
consultation document; and
— modelling of the renewable electricity market,
undertaken on our behalf by Oxera. Details of this work are also
published on the BERR website.
In summary, modelling suggests that we will be able to deliver
13.4% of electricity from ROC eligible renewable sources by 2015
under a banded scenario up from 11.4% under the base (technology-neutral)
scenario. These figures do not take account of the renewable technologies
which are not supported by the RO, including existing large hydro-electric
schemes and conventional Energy from Waste (EfW) power stations.
A Feed-in tariffs regime makes it compulsory for somebody
(eg in Germany the network operator) to pay fixed prices for renewable
electricity. This approach provides generators with a regulated,
fixed income/MWh. However it imposes additional hidden costs on
the electricity market which will be passed onto the consumers
and renewable generators have no incentive to build plant near
centres of demand. For example, network operators need to balance
generation when the wind doesn't blow and reinforce the networks.
However, Germany's Feed-in tariff regime also comes at a price.
The International Energy Agency estimates that the German feed-in
tariff regime between 2000 and 2012 will result in payments of
€68 billion and that by 2012 the annual cost would be between
€8-9½ billion. It is also worth noting that solar PV
provides only some 4.5% of Germany's renewable electricity, while
taking some 20% of the total payments.
The Renewables Obligation (RO) places an Obligation on electricity
suppliers (the companies who sell direct to consumers) to source
a certain percentage of their electricity sales from renewables,
or to pay a penalty (buy-out payment) for each MWh by which they
fail to meet this Obligation. The buy-out fund is then shared
among those who have supplied renewable electricity. This provides
a positive incentive to compete in delivering renewables as success
for a supplier means that they will receive money from their competitors.
It also allows the market price for renewable electricity to go
up in less windy years, spreading the risk for generators.
Renewable Generators enter the market on equal terms with
other generators. They have to pay the cost of connection to the
grid and any regional use of system charges that apply. So there
are no hidden costs imposed on consumers.
Generators receive their reward by selling both their electricity
and Renewable Obligations Certificates (ROCs; which evidence their
renewable production) to suppliers. Generally they enter into
a long-term power purchase agreement with suppliers which covers
both of these elements and offers a guaranteed floor price plus
a share of any upside. In practice, therefore, they get a negotiated
feed-in tariff from the suppliers.
5. On top of the costs of building and running the different
types of electricity generators, how much investment in Britain's
transmission and distribution networks will different renewable
energy sources require compared to other forms of generation?
Are the current transmission and distribution systems capable
of managing a large share of intermittent renewable electricity
generation and, if not, how should they be changed? Are the rules
about how we connect capacity to the grid supportive of renewables?
The renewable energy targets set an unprecedented challenge
for our electricity networks. We will be publishing analysis of
the likely reinforcement requirements alongside the Renewable
Energy Strategy and setting out in the Transmission Access Review
how the planning of essential investment will be taken forward
by the network companies with the support of BERR and Ofgem. A
major area of investment will be the connection of off-shore wind
farms to the main on-shore transmission system.
The indications from National Grid and our own advisers are
that there is no technical barrier to the connection of renewable
generation at, for example, a 40% penetration level. The indications
are that the challenge is an economic rather than technical one,
ie ensuring that sufficient capacity of all technologies has the
right incentives to remain on and join the network to support
the deployment of intermittent renewable technologies and ensuring
the economic and efficient operation of the balancing mechanism.
We will be publishing the final report of the Transmission
Access Review shortly. Among the key conclusions of the review
are that grid access rules need to change significantly in order
to meet the demands of a different generation mix, in particular
to allow transmission capacity to be efficiently shared between
thermal generation and intermittent renewable generation. Firm
connection dates for developers coupled with better incentives
for the transmission companies to deliver timely connections are
likely to have an important part to play.
Industry working groups have already started work on the
detailed analysis needed to deliver the necessary changes to industry
codes.
6. How do the external costs of renewable generation of
electricity—such as concerns in many affected rural areas
that wind farms and extra pylons spoil areas of natural beauty—compare
with those of fossil fuels and nuclear power? How should these
be measured and compared? Is the planning system striking the
right balance between all the different considerations?
Visual disamenity is a non-market good and therefore its
value has to be estimated using valuation methods such as survey
and choice experiment techniques or from evidence collected through
stakeholder participation methods.
Evidence from such studies suggests that visual disamenity
costs are very location and project specific, and are a function
of number of factors including: type of landscape being disturbed
and the nature of the disturbance, the characteristics and incomes
of people being asked, the distance they live from the landscape,
the extent to which the landscape is unique, already contains
existing man-made structures, the extent to which amenities are
lost and peoples' valuation of these losses. The importance of
these effects and the values people assign to them are site and
project specific. No estimates of visual disamenity costs of electricity
generation from renewables, fossil fuels or nuclear have been
made by Defra or BERR.
It is important to ensure that a consistent and comprehensive
framework is used for valuing both the positive and negative environmental
impacts of renewable energy proposals. As indicated above there
are number of valuation methodologies which can put values on
environmental benefits and costs to enable comparisons between
different proposals.
"In the Government's Planning White Paper Planning
for a Sustainable Future which we published in 2007 we underlined
planning's fundamental importance to the quality of people's lives.
We have described how, when planning is done well, it enables
us to build thriving, healthy, sustainable communities where people
want to work, shop, live or visit. It supports the economic development
which is vital to create jobs and ensure our continuing prosperity
as a nation. It helps us to protect our natural and historic environment
and ensure everyone has access to green space and unspoiled countryside.
It enables the delivery of essential infrastructure which allows
us to travel and enjoy access to clean, affordable energy, water
and waste facilities. And it supports individual citizens in improving
their homes and property while protecting the wider community
from over-intrusive development. Planning does all of this by
helping to ensure development meets economic, social and environmental
objectives in an integrated and sustainable way.
This is why an effective and efficient planning system which
is responsive to the needs of society is essential. But we know
people have different views of, and different interests in, the
way land is used. Planning is the forum for resolving those differences.
On the one hand, it needs to help necessary development and modernisation,
on the other, it seeks to protect and enhance our natural and
historic environment and to ensure that a community's way of life,
health and well-being are enhanced rather than harmed. Planning
departments and committees are one of the parts of local government
that people most frequently engage with because they take a strong
interest in the future development of their neighbourhood and
community.
The vision set out in the Planning White Paper is for a planning
system which supports vibrant, healthy sustainable communities,
promotes the UK's international competitiveness, and enables the
infrastructure which is vital to our quality of life to be provided,
in a way that is integrated with the delivery of other sustainable
development objectives, and ensures that local communities and
members of the public can make their views heard.
We have said in the Planning White Paper that on the whole
the planning system works well and allows us to encourage a thriving
economy, deliver vibrant, healthy communities, protect and enhance
our environment, and ensure people have a say in how their area
develops. In particular, the plan-led approach with development
plans and policies at both local and regional level on which the
public is consulted, and which then provide a framework for assessing
individual planning applications, is a good one.
But we also made it clear that the long-term challenges for
planning are increasing. Over the coming decades, debate and decisions
about where development should take place are likely to become
more difficult. We want to ensure that the whole planning system,
including both the town and country planning system covering residential
and commercial development and some infrastructure, and also the
range of separate consent regimes for specific types of infrastructure,
is fit and able to cope with these challenges.
These challenges include the need to reduce emissions of greenhouse
gases to tackle climate change and to use natural resources wisely.
At the same time we need to support economic development so that
it can generate high quality jobs in the context of rapid globalisation.
We also need to see more houses built so that people can afford
decent homes. And we need to put the right infrastructure in place
to meet our needs for travel, energy, water and public services.
The Planning White Paper set out our detailed proposals for
reforming the planning system, building on Kate Barker's recommendations
for improving the speed, responsiveness and efficiency in land
use planning, and taking forward Kate Barker's and Rod Eddington's
proposals for reform of major infrastructure planning. It proposed
reforms on how we take decisions on nationally significant infrastructure
projects—including energy, waste, waste-water and transport—responding
to the challenges of economic globalisation and climate change.
It also proposed further reforms to the Town and Country Planning
system, building on earlier improvements to make it more efficient
and more responsive.
Many of these reforms are to be taken forward through the
framework set out in the Planning Bill. But we have already given
a boost to renewable energy through our new Planning Policy Statement
(PPS) on Climate Change, published in the run up to Christmas
last year. This is already helping create an attractive environment
for innovation and for the private sector to bring forward investment
in renewable energy. At the same time, the PPS has given local
communities real opportunities to influence and take action on
climate change. Regional and local planners are expected to actively
plan for, and support, renewable energy generation, including
through allocating and safeguarding sites. Regions are expected
to set targets for renewable energy capacity in line with national
targets, or better where possible. Applicants for renewable energy
should no longer be questioned about the energy need for their
project, either in general or in particular locations. These new
rules are being supported in the Planning Bill by a statutory
duty on local planning authorities to take action on climate change."
7. How do the costs of generating electricity from renewables
compare to fossil fuel and nuclear generation? What are the current
estimates for the costs of "greener" fossil fuel generation
with carbon capture and storage and how do these costs compare
to renewable generation? What impact do these various forms of
electricity generation have on carbon emissions?
The costs of generating electricity from renewables are in
general currently higher than their conventional fossil fuel and
nuclear counterparts. For renewables the cost per MWh depends
largely on the technology involved. The generating costs for hydro,
for example, are relatively similar to those for coal, gas and
nuclear. In general, however, most renewable technologies, in
particular emerging technologies, are currently not competitive
and so require government support. Over the summer we will be
consulting on a package of measures that we believe will deliver
the most cost-effective approach to meeting our renewable energy
targets.
A barrage or other tidal scheme in the Severn Estuary could
make a significant contribution to renewable energy targets but
the Government needs to understand better the costs, benefit and
impact of such a project before deciding whether to support it.
A two-year, cross-government feasibility study is now underway,
looking at all the issues involved.
UK energy industries are the largest single contributors
to UK greenhouse gas emissions, contributing over a third (54
million tonnes) of the total amount of carbon dioxide emitted
in the UK. As such, generating our energy from sources that emit
low or even zero levels of greenhouse gases, such as renewable
energy, offer the potential of significant carbon emissions reductions.
8. How do the costs and benefits of renewable electricity
generation compare to renewables in the other key forms of energy
consumption—transport and heating?
On 13 March 2008, Poyry Energy (Oxford) Ltd published a report,
commissioned by BERR, assessing the impact of the commitment made
at the Spring Council 2007 to deliver 20% of EU energy consumption
from renewable sources by 2020. The report is available on the
BERR website.
The analysis analyses the relative costs and renewable resource
availability across the UK and other EU member states for the
electricity, heat and transport sectors. It examines the mix of
technologies needed to achieve the target across the EU member
states.
The study presents the cost of achieving the target through
different methods, ranging from least cost trading mechanisms
through to domestic deployment in individual member states. Whilst
it is recognised that a step change in the deployment of renewable
technologies will be needed to deliver the 2020 target, the study
does not explore the barriers that need to be overcome for this
to take place or the financial support schemes that would be needed
to be introduced across member states.
We will be consulting this summer on the Government's Renewable
Energy Strategy. The consultation will contain assessments of
the impacts on the electricity, transport and heat sectors of
a potential scenario for meeting the EU2020 target.
9. If the UK is to meet the EU target that by 2020 15%
of energy consumed will come from renewables, will most of this
come from greater use of renewable sources in electricity generation?
If so, why? Should British support for renewables in other countries
be allowed to contribute towards meeting the target for the UK?
Preliminary estimates based on research studies in the electricity,
heat and transport sectors suggest that a cost-effective split
in renewables technologies would result in just under half of
the target met through the electricity sector, one third in heat
and one fifth from transport.
However, within the overall framework the Government puts
in place, it will be for the market to determine what kinds of
technology should be used, and to deploy it. The contributions
from different sectors will largely depend on how the market and
supply chain respond to the signals we provide, and how successful
we are in overcoming the constraints on development.
The burden-sharing methodology proposed by the Commission
did not take into account the cost-effective potential of renewables
in the Member States. Therefore without effective and workable
trading provisions which allow for a more efficient use of renewable
resources across Europe, it will not be possible to meet the 20%
EU target cost-effectively. Independent research carried out by
Poyry consultants for the UK suggests that full and open trading
could save the EU up to €7 billion a year in 2020, chiming
with the Commissions own impact assessment—although this
is unlikely to materialise. In addition to the trading regime
based on the transfer of Guarantee of Origin certificates that
has been proposed in the directive, the Commission have also proposed
that some renewable electricity that is produced outside the EU,
under certain conditions, could also contribute to targets.
10. How would changes in the cost of carbon—under
the European emissions trading scheme—affect the relative
costs of renewables and other sources of energy? Would a more
effective carbon emissions trading scheme remove the need for
special support of renewable energy?
Installations that are covered by the EU Emissions Trading
Scheme (which includes large electricity producers and energy-intensive
industrial sectors) are required to submit one EU allowance for
each tonne of CO2 that they emit in a given year. In Phase I (2005-07)
and II (2008-12) many of these allowances were allocated to installations
for free but in future Phases it is likely that a significant
number of allowances will be auctioned. The combination of the
cap on emissions and a high rate of auctioning will mean that
electricity producers will face the full cost of carbon associated
with the power that they generate. Generation that does not produce
carbon emissions will not face a carbon price and will, therefore,
face a cost advantage relative to conventional fossil generation.
All things being equal, a higher carbon price will increase the
incentive for zero-carbon generation capacity and would potentially
result in greater deployment of renewable capacity.
The Government is currently working with the Commission and
other Member States to agree a new and ambitious ETS Directive
for Phase III of the scheme. It is unlikely however that the level
of the carbon price in Phase III will be sufficient to remove
the requirement for special support for renewable energy. The
EU ETS is a market-based instrument that should result in the
emissions cap being met in an efficient manner through bringing
on the least-cost abatement options. The level of the carbon price
that would be required to incentivise some of the renewable energy
technologies that would be required to meet the target (eg, €100/tCO2
abatement through offshore wind & €260/tCO2 through wave)
is significantly higher than any feasible level of the EUA price
that we are likely to see in Phase III of the scheme.
Furthermore, there are certain renewable technologies (in
particular, biofuels for transport and renewables heat in the
domestic and service sectors) that do not fall under the EU ETS,
so would not benefit from a higher carbon price.
11. What are the costs and benefits of the present generation
of biofuels? Will there be a second generation of biofuels and,
if so, what are the estimated costs? What are, or are likely to
be, the carbon emission impacts of first and second generation
biofuels, and what are the other relevant environmental effects?
The Renewable Transport Fuel Obligation as currently envisaged
will mean carbon dioxide emissions from motorists should be cut
by around 2.5 million tonnes a year by 2010 as biofuels are gradually
introduced into fuel sold at UK filling stations. The Impact Assessment
for the Renewable Transport Fuel Obligations Order 2007 (SI 3072)
estimated that the main cost of the RTFO up to 2020 is the expected
higher costs for biofuels compared to the fossil fuels they replace.
This predicted a range of possible discounted total fuel costs
(in 2007 prices) from £2.1 billion to £5.8 billion.
Other costs identified were the cost of new facilities, administrative
costs and some costs at forecourts. The Impact Assessment therefore
estimated the total cost at between £2.4 to £6.6 billion
whilst the total benefit of the policy was estimated at between
0.8 billion to 0.9 billion in terms of the value of reducing carbon
emissions.
In the future the great hope for biofuels is that over time
their costs will come down and their carbon savings go up. It
is through creating a market for today's biofuels that we will
encourage the advancement of second generation biofuels. Second
generation biofuels are generally those produced from feedstocks
other than food crops, for example, "green waste" which
can reduce pressure on land and the amount of waste that goes
into landfill.
Some biofuels will offer good carbon savings whilst others
may not offer any at all. In the light of the concerns that have
been expressed recently around some of the wider, indirect impacts
of first generation biofuel production, the Government has asked
the Renewable Fuels Agency to lead a review of the emerging evidence
on these impacts. The review will look at the wider environmental
and economic impacts of biofuels and will also look at the evidence
on GHG-savings of current and future biofuel technologies and
identify key areas of uncertainty. The review's findings will
be published in late June, and should help to ensure that we have
the right evidence base to support decisions on the future of
the Renewable Transport Fuels Obligation (RTFO) scheme and longer-term
targets.
16 June 2008
1
EU figures: 2005, source: European Commission Back
2
2005, source: IEA Energy policies of IEA countries, 2007 Review
the United States Back
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