Industry’s energy bills should rise to encourage energy efficiency, environment minister Michael Meacher said last week.
And the Government will act quickly on Lord Marshall’s proposals to bring in an energy tax, he told a Combined Heat and Power Association conference.
Meacher said CHP had a big role to play in meeting UK commitments to cut gas emissions that contribute to climate change.
CHP’s contribution to UK electricity supply has doubled in the last decade, he added, and the Government wants it to double again in the next decade. The Energy Technology Support Unit has estimated that CHP could meet two-thirds of industrial energy demand by 2010.
‘If we are going to keep energy conservation high on management’s agenda, then we have to look at the cost of energy,’ said Meacher. He added that the Government had not decided ‘if there will be a tax or another alternative’, but agreed that a price rise was implied.
Marshall proposed an energy tax on industry and tradeable permits to emit specified volumes of greenhouse gases. The tax would be set at a low level and recycled to industry to avoid damaging competitiveness. Marshall said more studies would be needed before either option could be introduced, but the permit scheme is thought more problematic.
Meacher said the Government wanted to move quickly on the tax and that there was no intention to introduce interim measures.