Clean energy delays alarm green lobby: Official dithering has held up plans for renewable power. Susan Watts reports

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The Independent Online
The green lobby was surprised and delighted last year when the Government, in the form of the then Secretary of State for Energy, Colin Moynihan, committed itself firmly to renewable energy - 'clean' power obtained from the action of the wind, waves and sun.

But his plans to help develop the renewable energy industry have been delayed for more than a year by political changes, and now the industry is suggesting that the nuclear lobby has caused a further hitch. The suggestion is that the nuclear industry wants an extra slice of future subsidies earmarked for non-fossil-fuel energy, currently under negotiation with the European Commission. Officials in Brussels are said to be resisting this.

Last summer, Mr Moynihan, the self-styled champion of the renewables cause, set up the high- powered Renewable Energy Advisory Group to review Britain's clean-energy resources. In November he made a surprisingly upbeat announcement in which he increased the number of projects entitled to help under a government-directed scheme called the Non-Fossil Fuel Obligation (NFFO). This pays renewable projects a premium price for their electricity.

Then came the general election, which held up the group's work by months. Mr Moynihan also lost his seat, and renewable energy its champion. Since the election, a deathly hush has fallen on the subject. The group's report has yet to appear, although it has been all but complete for several months.

The Department of Energy has been absorbed by the Department of Trade and Industry, and where three ministers dealt with energy issues before the election, renewable energy is now only one of a list of responsibilities dealt with by a single minister: Tim Eggar.

Jeremy Sainsbury, a member of the advisory group, said: 'The Government is aware that time is ticking by. This will damage confidence within the companies involved, and is not going to do the wind-energy industry very much good within banking circles.'

Andrew Garrard, a wind-energy consultant and former chairman of the British Wind Energy Association, said: 'It was to have been a bright new world, and now there is just silence. What we need is a long-term timetable and a firm commitment and we have got neither.'

David Porter, chief executive of the Association of Independent Electricity Producers, said: 'There are lots of people out there with good projects and ideas for more. They believed in the Government's white paper on the environment but they don't know whether to keep their offices going.'

The talks between the DTI and Brussels aim to extend the NFFO beyond its cut-off date of 1998. The pounds 1.3bn NFFO levy is charged to electricity consumers, and supports both nuclear power and renewable projects by paying them extra for their power. Nuclear power receives around 98 per cent of the levy, renewables get the remaining fragment.

As the cut-off date approaches, renewable-energy schemes have found it increasingly difficult to raise finance, since they have less and less time to make a return on their investment.

The Renewable Energy Advisory Group wants rolling contracts for projects under the NFFO, giving them between eight and 15 years of support from the date they begin. The Government wants to secure some form of extension beyond 1998 before announcing the next round of projects to receive a subsidy. 'It is taking so long to get a new NFFO on the streets, that we are facing a great hole again,' said David Lindley, an advisory group member and managing director of one of Britain's largest wind-energy companies.

One sticking point in the negotiations with Brussels lies with officials in Europe who oversee competition rules. They see the NFFO as anti-competitive, and will need time-consuming persuasion to change their minds. Dr Lindley said cynics might argue that the Government is not pushing Brussels hard enough. Renewable-energy producers fear this will not now happen, since Mr Eggar is busy with privatisation of the coal industry.

The Association of Independent Electricity Producers fears the nuclear industry is the other main problem, and that it is stepping up pressure to be included in any extension. The guaranteed extra cash for its power would help to buoy up this troubled industry. Energy officials within the European Commission have said they will agree for renewable energy, but not for nuclear power.

Dr Lindley said: 'One would be surprised if the nuclear industry was not, quite properly, concerning itself with what happens after 1998.' A spokesman for the DTI would not say whether the Government has put in a plea for the nuclear industry alongside renewables.

The Association of Independent Electricity Producers has written to Mr Eggar asking if its fears are justified.