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ENERGY CROPS OFFER NEW OPPORTUNITIES FOR RURAL ECONOMY

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A£66m support scheme for bio-energy projects was launched ...
A£66m support scheme for bio-energy projects was launched

today by energy minister Brian Wilson. The money will support the

establishment of up to six power stations to produce electricity from

burning fast growing crops such as straw, willow or miscamphus

(elephant grass), and up to a hundred smaller power and heat plants.

The Bioenergy Capital Grants Scheme, jointly funded by DTI and New

Opportunities Fund, will support power generation and combined heat

and power projects using energy crops and other biomass. It is

expected to lever in approximately£200m of private sector

investment.

Speaking in Edinburgh today, Mr Wilson emphasised the potential

benefits to the rural economy of crops-for-energy.

He said:

'Biomass projects up to now in the UK have been mainly small. This

scheme, the first initiative of its kind, will stimulate this

technology.

'Rural communities have much to gain from the growth of this

industry, in terms of jobs and farm incomes. Harvesting and transport

will provide employment throughout the difficult winter months - when

most energy crops-management takes place.

'A key reason for DTI funding of this programme is to bring forward

advanced technologies - such as pyrolysis and gasification and to

develop supply chain networks.

'We have also recognised within the Renewables Obligation, the

supporting role co-fired power stations can play in helping to

develop biomass and energy crops, and in delivering renewable energy

capacity quickly and at relatively low cost. We have consulted widely

to ensure that the scheme meets the industry's needs and commercial

requirements as well as the government's policy objectives.

'At the same time, the government has already put in place support

for the establishment of energy crops through DEFRA's Energy Crop

Scheme, worth an additional£29m over the next 6 years.

'It is the role of government to ensure secure, diverse and

sustainable supplies of energy at competitive prices, now and in the

future. Renewable energy, from a range of sources, clearly

contributes to all three - security, sustainability and diversity.

'Together these schemes will help the growing number of

technologists, developers, investors and planners interested in this

ecologically-strong industry to establish a firm foothold in our

future energy markets. They serves a fundamental government goal - to

establish renewable energy as a key player in meeting the UK's future

energy needs.'

Notes

1. Projects will be assessed for quality against published criteria.

The money will go towards the capital costs of new projects -

application packs and guidance notes are available from

www.dti.gov.uk/renew/eoi.htm.

2. The Renewables Obligation requires electricity suppliers to

provide a specified proportion of their electricity from renewable

sources. This became law on 1 April in England and Wales as did a

corresponding Order in Scotland. These two Orders are the single most

important measures by government to enable industry to meet the 10%

renewables electricity by 2010 target. Biomass and energy crops are

eligible renewable sources under the Obligation.

3. Other measures include an allocation of over #260m over 3 years

mainly for capital grants for early demonstration projects in

offshore wind, energy crops (see main text for details) and solar

photovoltaics and an enhanced R&D programme to help bring forward the

next generation of renewable energy technologies such as wave energy

and tidal stream.

4. Renewables electricity has also been exempted from the Climate

Change Levy.

5. Regional planning strategies are currently being revised to

incorporate policy planning guidance on renewables (PPG 22).

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