UK renewable energy support announced

Largest yet national financing seen as beginning of "new and strong drive" for renewables

Up to UKĀ£23m (Ecu33.3m) will be made available for renewable energy projects in England and Wales over the next 20 years, the UK government announced today. British support for renewables is organised through a levy on electricity suppliers paid by consumers through higher bills. The proceeds are used to pay selected renewable energy producers the difference between their costs and the electricity pool price. Today, the government announced a fifth round of funding under the scheme, which is known as the "non-fossil fuel obligation" (NFFO). Some 538MW of renewables capacity funded under previous NFFO rounds is currently generating electricity. The new round is the largest yet, and will add up to a further 1,177 MW, the government said. A separate announcement on renewable energy funding in Scotland is due early next year. One reason the size of the scheme has increased is that costs of generating renewable energy have fallen. The average for landfill gas, energy from waste and wind power schemes being to be funded under NFFO-5 is 2.71 p/kWh, just 0.04 p/kWh more than the current electricity pool price. Announcing the funding round, energy minister John Battle said he expected NFFO-5 "to become the first step in our new and strong drive for renewables". The government is expected to decide before the end of the year whether to adopt a 10% share for renewables by 2010 as a national goal.

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