Stephen Timms MP

Action Renewables Conference

I am particularly pleased to see industry and government working together through Action Renewables, because that is the way to achieve the growth in renewables that we are all so keen to see. I know you have already been working hard to raise the profile of renewable energy in Northern Ireland and I wish you every success with that important task. You have an impressive programme and I particularly welcome the strong community focus of your brief.

Everybody recognizes now that we cannot simply go on burning conventional, fossil fuel sources to the extent that we have done in the past. And now, in the energy white paper which we published in February, we have set out a strategic framework for energy policy over the next fifty years, and for the first time ever we have put the environment right at the centre of energy policy. We have set out four goals:To put ourselves on a path to cut the UK's carbon emissions by some 60 percent by 2050 and to make real progress in that direction by 2020;

• To maintain the reliability of energy supplies so that domestic and industrial consumers can rely on energy being there when they need it;
  
  
• To promote competitive energy markets, to improve our productivity; and
  
  
• To ensure every home is adequately and affordably heated.

Our view is that we can achieve these four together, and that we must do. There are three broad streams of activity which flow from the white paper commitments:

1. Developing low carbon energy generation;
2. Breaking the link between economic growth and energy consumption;
3. Working internationally to tackle climate change.

Given our topic today I shall be concentrating on the first of them, but let's not forget the scale of the other changes we need to bring about too.

The goal of a 60% cut in carbon emissions was first proposed by the Royal Commission on Environmental Pollution, and in the white paper we accepted it. The white paper also confirmed our target that 10% of our electricity should be supplied from renewable sources by 2010, and set out our aspiration to double that share to 20% by 2020. It is a tough challenge that requires a great deal of work. I shall be spending a week at the end of this month visiting renewable power developments around the country, seeing for myself how they are progressing, and I hope helping to draw attention to their importance.

The Renewables Obligation, which has been in place now for a year and a half in England, Scotland & Wales, is the main mechanism that we are using to encourage year on year growth. It requires electricity suppliers to provide an increasing share of their electricity from renewable sources - it was 3% last year, 4.3% this year and it will rise to 10.4% by 2010. Renewables Obligation Certificates are issued for all the renewable electricity generated, and suppliers can trade certificates or buy out their obligation at the end of the year if they wish to. It is a powerful, market-based mechanism.

I am delighted that Northern Ireland will soon be putting an obligation in place, with implementation of the Northern Ireland Renewables Obligation planned for April 2005, with trading of Renewables Obligation Certificates taking place UK-wide from then on, and with the target that 12% of Northern Ireland electricity will come from renewables by 2012.

As elsewhere in the UK, the target will require substantial investment, innovation and commitment. Action Renewables can help by raising awareness and by creating platforms for discussions like this one, to raise the profile of renewables, and bring industry and government together. We want to build enthusiasm across the whole community - I was delighted that our Clear Skies programme, which provides funding for renewables initiatives at the community level, is supporting the provision of a wind turbine on the new Church of the Nativity building in Dunmurry. I want to see us harness more and more the very high level of community-level commitment and enthusiasm for renewable energy that is evident in every part of the UK.

It is not possible at the moment for Northern Ireland generators to participate in the Renewable Obligation system. They will though be able to prove their green credentials through the Northern Ireland Rego system. REGOs - short for Renewable Energy Guarantees of Origin - are being introduced to comply with Article 5 of the EU Renewables Directive. All producers of electricity from eligible renewables will be able to request these electronic certificates, which will be issued here by Ofreg. The system will be flexible enough to cope with requests from the smallest, even domestic scale, generators.

Northern Ireland is very well placed to take advantage of this scheme. We envisage that it is likely to be most attractive and useful for those who wish to do business across borders either into the Republic or into the rest of the UK, and provide their buyers with an assurance of the greenness of their electricity.

We are introducing the REGO system for renewables later this month. I am particularly pleased to be able to announce that we laid the legislation in Parliament just yesterday. Equivalent legislation for Northern Ireland will be introduced shortly.

Like the rest of the UK, Northern Ireland has an abundance of natural resources and opportunities. I was at a big wind energy conference in Germany a couple of weeks ago - 5% of German electricity is now generated from wind turbines, and the wind energy industry employs 100,000 people. It is a very serious industry, and we need to be very serious about it in the UK too. People told me how fortunate we are in the UK that we have so much wind, and I suppose from an energy point of view they are right! They also told me that, while in Germany it is necessary to place turbines high up on masts to catch the wind, in the UK we have plenty of wind down here at ground level! There is huge potential - and the long and beautiful coastline of Northern Ireland is another potential source for energy. Combine that with the innovation and expertise for which Northern Ireland is famous and the possibilities for the economy and the environment could be immense.

There has already been good progress. I was delighted that the biggest windfarm in Ireland opened at Altahullion in the North West just after I became Energy Minister, and that is now serving every school, every hospital and every public library in Northern Ireland.

Our funding packages have been specifically tailored to kick start some of the emerging technologies less well established than onshore wind - like bioenergy, solar photovoltaics, offshore wind, and wave and tidal energy. Some £350 million is now available to help give industry the boost that it needs.

Balcas received a £2 million grant as part of our bioenergy capital grant scheme to develop a wood-fired CHP plant in Enniskillen. The plant will enable Balcas to meet its own electricity requirements, provide electricity for thousands of homes, and safeguard existing jobs in the area.

NIE are leading the way as the first electricity supply company to have solar photo voltaic panels on their own buildings. We were also pleased to see them offering top up grants to individuals and organizations who are installing PV systems with support from our Major Demonstration Programme. The finance and funding opportunities are in place, and I would urge others to take advantage them.

Both DETI and Renewables UK are there to help the industry. Renewables UK is based in Aberdeen and was set up specifically to promote the UK renewables industry and to help the UK make the most of the industrial opportunities arising from the worldwide growth of renewable energy. The earliest modern wind power technology was developed in the UK in the 1980s, but at the time Government wasn't interested and the industrial lead was lost to Denmark and to Germany. We don't want that mistake to be repeated. Renewables UK has been located deliberately in Aberdeen because there are close potential links between our world class offshore oil and gas industry and the emerging renewables industry, particularly in offshore wind and in the future in wave and tidal energy generation. The expertise and advice is in place. Please take advantage of it.

The reform of the common agricultural policy has big implications for the rural population in Northern Ireland. But through the development of renewable energy there are important new opportunities for farmers to grow crops specifically for biomass electricity generation. I gather this is on your agenda for tomorrow. And in England we have a power station fuelled by chicken litter! There are great opportunities that we need to make the most of.

You have already heard today how the development of renewables is all about striking a balance. Moving towards the low carbon economy cannot be taken for granted. It will require hard work, and commitment. But it also will require achieving a sometimes delicate balance between competing priorities - over land use, the problem of fuel poverty, energy efficiency, and of course the price of electricity. But there are also many new opportunities - some of which we realize already, others just around the corner.

Planning is often cited as one of the biggest problems for developers. For that reason I welcome the intention expressed today by the Department of the Environment's Planning Section to engage in a review of the planning guidance for Northern Ireland. Fresh guidance is necessary in order to promote appropriate development. And "appropriate" will always be the key word. Revised guidance has already been well received in Scotland, and in London the Office of the Deputy Prime Minister's Planning Policy Section are working with my Department to issue a consultation paper on renewables and the planning process.

I have focused mainly today on the potential for renewable energy to deliver our commitment to reduce carbon emissions. But renewables can also contribute to some of our other white paper goals.

Northern Ireland has one of the highest incidences of fuel poverty anywhere in the UK - with more than three times the number per head of population being classified as fuel poor than in England. That's 33% of the population - too high a figure. I share the Northern Ireland administration's desire to eradicate the problem once and for all. Renewables are sometimes seen as likely to make the problem worse, because renewable generation has tended to be more expensive than more traditional forms of energy production. But small-scale, community based schemes offer a wealth of opportunities here - an environmentally aware solution - with electricity being used almost at the point of production, and any extra being sold at a profit. Our Clear Skies programme and the Community Renewables Initiative can both help here.

We have made progress in dealing with fuel poverty. In 1996 there were 5 1/2 million households in fuel poverty in the UK. By 2001 that figure had almost halved to about 3 million households. In Great Britain, lower energy prices and enhanced benefits have been the major contributors to this fall. Improved energy efficiency has also played a role. But for progress to continue we will need to raise our game on energy efficiency. Environmental initiatives will put upward pressure on prices per unit of electricity, we will need to ensure that the fuel poor have energy efficiency measures installed so that their overall energy bills are lowered

So thank you once again for the chance to be with you this afternoon. The development of renewable energy offers immense benefits to everybody. I wish Action Renewables every success with your vitally important work - and what I hope is that we can all work together over the months ahead, to maximize our chances of success with the ambitions that we all share.

Thank you.