Tees Valley eco sector bosses applaud ‘world’s first carbon budget’

Apr 23 2009 by Kelley Price, Evening Gazette

ECO sector bosses in the Tees Valley applauded a ‘headline grabbing’ green Budget - but claim the devil will be in the detail.

Alistair Darling delivered the ‘world’s first carbon budget’ yesterday, with an ambitious 34% reduction in carbon emissions by 2020.

Offshore wind received £525m of new financial support over the next two years.

A new ‘funding mechanism’ will be used to finance two to four demonstration projects for carbon secretion technology Carbon Capture and Storage (CCS), which will allow coal, oil and gas to continue as a ‘major source of energy for the forseeable future’. Green company Progressive Energy is in the running for a £1.5bn CCS project on Teesside.

A Climate Change Levy exemption from 2013 announced for CHP projects, which will bring forward £2.5 billion in investment.

A further £405m of new funding will encourage low carbon energy and advanced green manufacturing in Britain.

But while the announcements made for good headlines, industry chiefs say its unclear what constitutes new and old money.

John Barton, project director at Renew, said there was limited support for some schemes such as the proposed eligibility period for an offshore wind incentive, which was too short.

"The proposed ROCs incentives will only last until March next year," he said, "the chances of some of the large multi-billion pound projects coming online in time to meet this are pretty slim.

"Clearly it’s good to finally see some real focus on green issues. What’s not so clear is what new money has been made available.

"Here is a Government without much left in the kitty, trying to make it look as though there is huge support for a low carbon future."

Ian Waller, from Stockton consultancy Five Bar Gate, said stretched carbon reduction targets were better than under-ambitious ones.

"It’s difficult to find fault with the headline, it’s like asking people to vote for motherhood and apple pie. The devil will be in the detail.

"A 34% cut in is a stretch target that with the right support can help deliver a

renewable industry in transport, heat and power. But there will be implementation issues to resolve enabling industry to build with confidence on this announcement."

Highlighting the lack of any remedial announcement on the Government’s delay of the Renewable Transport Fuel Obligation (RTFO) in January, he echoed the views of biofuels bosses on Teesside: "The Government’s track record on the RTFO is poor, with a partial U-turn after a year, helping to keep investors away from the sector. Not repairing the damage caused by this may be an oversight, but may yet

be resolved pending further detail to come."

Alwyn Hughes, CEO of Ensus, the company behind Teesside’s 400 million litre bioethanol plant, said: "There are lots of headlines about the support for renewables, but it’s not clear how positive they are until we examine the detail.

"It’s disappointing there is nothing on the RTFO, our ambition is to invest further in the North-east but we need market mechanisms such as this."

Richard Nickels, CEO of Biofuels Corporation, said there were no surprises over the lack of an RTFO announcement, but other parts of the Budget were positive.

"If the £400m for low carbon and green manufacturing stimulus is available now, that’s fantastic news. We have the skills and the infrastructure, the Tees Valley is where it should be directed."

Dr Graham Hillier, director of low-carbon energy at Centre for Process Innovation (CPI) said: "It’s important to support turning UK research into real products instead of spending money on overseas technologies. It’s positive the Government is recognising we need to do something."

Graham Ingleson, General Manager at SITA UK, the company which operates the Tees Valley energy-from-waste facility at Haverton Hill, near Billingham said: "We welcome the announcement in yesterday's budget that electricity generated by combined heat and power facilities (CHP) will be exempt from the climate change levy. This will provide a good incentive for new facilities to be built.

"SITA UK recently secured planning permission to develop a new CHP facility adjacent to its existing plant in Billingham. It will generate electricity and heat from household waste.

"We are delighted that the Government is providing additional support for this type of project."