British CHP group gives qualified welcome to government statement

The UK Combined Heat and Power Association (CHPA) gave a cautious welcome to comments made in the chancellor’s pre-budget statement Tuesday in which he “recognised the difficult market conditions facing operators of CHP systems”, but said that he had failed to act with the urgency the situation demands.

In a statement, the CHPA said that in the last six months the industry has been devastated by Government reforms of the electricity market (the New Electricity Trading Arrangements – NETA) that have marginalized green power generators. It claimed that NETA had undermined even the limited measures apparently designed to support the Industry and that a combination of weak incentives along with NETA means that it is now virtually impossible to export green power from CHP.

CHPA director David Green said, “We welcome the Chancellor’s willingness to ‘consider’ fully exempting CHP from the Climate Change Levy (CCL), but the CHP industry needs deeds not words. “We have had four years of half delivered promises. These are not stopping the loss of jobs and expertise that the CHP industry is now experiencing and are also putting at risk some ௿½3 billion of new investment.”

In 1999 the government decided to exempt CHP, along with renewables, from the Climate Change Levy. Yesterday, Gordon Brown said that the DTI were consulting on the impact the NETA has had during its first few months of operation – particularly on smaller generators. He said, “The government will also look at the environmental case for providing more favourable treatment for CHP within the CCL, taking into account the role which CHP might play in meeting the UK’s climate change targets.

Combined Heat and Power is expected to deliver 30 per cent of the industrial carbon savings, and the Government has a policy commitment to double the UK’s use of CHP by 2010.

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