CHP suppliers gain more concessions

The Government is to make it easier for small combined heat and power producers to sell electricity as part of an effort to meet ambitious greenhouse gas reduction targets. The move follows Chancellor Gordon Brown’s announcement last month that electricity generated from `good quality’ CHP and renewable sources would be exempt from the energy tax. […]

The Government is to make it easier for small combined heat and power producers to sell electricity as part of an effort to meet ambitious greenhouse gas reduction targets.

The move follows Chancellor Gordon Brown’s announcement last month that electricity generated from `good quality’ CHP and renewable sources would be exempt from the energy tax.

That concession has already spurred fresh interest in CHP. Last week Aylesford News Print signed an agreement under which National Power will build a further 40MW of CHP capacity at a cost of £15m to supply its paper mill – an expansion that will enable the CHP unit at the site to meet all the mill’s current and planned requirements.

Only firms with large heat and electricity demand can justify such large investment, however, and the Government’s latest effort is designed to make it easier for smaller users to buy their energy from such sources.

Small generators have traditionally been discouraged by the high administrative cost of selling through regional distribution networks, and poor information on charge levels.

Energy minister Helen Liddell promised last week to improve access by reducing the regulatory and cost burden associated with network access. She described the proposals as `particularly relevant to renewable and CHP plants’. The initiative will include a review of network access and charging issues led by the regulator.

Environment Minister Michael Meacher also said last week that the Government would be looking at partial tax exemptions for smaller CHP schemes and simplified exemption arrangements for plants which generate less than 1MW.

The Government sees a massive expansion of the renewable and CHP sectors as vital for achieving its target for reducing greenhouse gas emissions to 80% of 1990 levels by 2020.

* British Nuclear Fuels will close its Magnox power station at Bradwell in Essex in March 2002 with the loss of 350 jobs, the company announced this week. The plant was commissioned in 1962.