Watchdog to investigate DTI's green energy plans

The Government's spending watchdog is to examine ministers' policies to promote renewable energy, which are already failing to meet their targets.

The National Audit Office probe will centre on the Department of Trade & Indus- try's Renewable Obligation Certificates (ROC) programme. This is designed to offer electricity firms a financial incentive to switch to wind, wave and solar power.

The energy minister Stephen Timms has launched a push on renewable energy, putting on hold the development of nuclear power. By 2010 the Government wants 10 per cent of UK electricity to be from renewable sources, compared with only 1.8 per cent at present. According to the DTI's own targets, 4.3 per cent of electricity should now come from green sources.

The DTI is expected to tweak its ROC scheme next year. The NAO report will be published early in 2005.

ROCs are awarded according to how much green energy companies generate. Companies can then trade the certificates. But there are concerns that as more wind farms are developed, the tradable price of the certificates will fall. The energy research company Platts has calculated that the value of ROCs could fall by a third in three years.

The Government's plans to promote renewable energy are vital in securing the future supply of electricity. Since the DTI was forced to prop up nuclear generator British Energy, there have been concerns that demand for electricity could outstrip supply.