Energy target cost revealed

British engineering companies will be able to bid for up to £15bn of contracts linked with renewable energy projects, it emerged this week. This is the estimated cost of hitting the Government’s target to generate 10% of the UK’s electricity from renewable sources, industry regulator Offer warned this week. The figures were published in Offer’s […]

British engineering companies will be able to bid for up to £15bn of contracts linked with renewable energy projects, it emerged this week.

This is the estimated cost of hitting the Government’s target to generate 10% of the UK’s electricity from renewable sources, industry regulator Offer warned this week.

The figures were published in Offer’s advice to trade secretary Peter Mandelson on a fifth round of the Non-Fossil Fuel Order. This provides a subsidy from a levy on electricity bills for renewable generation schemes.

Professor Stephen Littlechild, head of Offer, said the target could be achieved using technologies such as wind power and energy crops. But the cost of doing so would require a levy rate of 6 8% for 15 years.

‘Whether the benefits of renewable energy justify incurring costs on such a scale must be considered,’ he added.

Littlechild said the fifth NFFO round could bring two orders, the larger one involving 166 landfill, gas, wind and waste-to-energy projects of over 900MW, requiring a £275m levy over 15 years.