The subsidy, the Non-Fossil Fuel Obligation (NFFO), operates via regional electricity companies, which pay renewable projects a premium price for energy. It is ultimately paid for by consumers and yesterday's announcement should cost the public an extra pounds 3 a year.
Renewable schemes will receive the premium NFFO price for between 15 and 20 years. This improves on the previous cut-off for subsidies set at 1998, regardless of when a project got under way.
Friends of the Earth, the environmental group, says there is sufficient interest in renewable energy schemes for the Government to extend the subsidy to embrace projects that could generate three times as much electricity.
The Government's aim is for 1,500 megawatts, or 3 per cent, of the UK's electricity production to come from renewable sources by the end of the century. It expects to announce two further rounds of subsidised projects in 1995 and 1997.
Yesterday, for the first time, the Scottish Office announced its own version of the NFFO subsidy for projects with a total production of between 30 and 40 megawatts. Northern Ireland is expected to announce its first NFFO for renewables in the next few days.Reuse content