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12th March 2003 - Minister encourages investment in renewables 14/03/2003 15:14:41
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Energy Minister, Brian Wilson, in a meeting at DTI headquarters today, welcomed proposals from the Renewable Power Association to accelerate the flow of new investment into sustainable energy sources. The RPA delegation, which included city financiers, explained the urgency of reducing the political risks facing investors. “The Government’s targets repeated in last month’s White Paper require an average of £1½bn of new capital investment each year”, stressed Philip Wolfe, RPA’s Chief Executive, “and that comes against a background of depressed City sentiment and reduced credit ratings in the electricity sector”. The Association proposed specific measures to enhance investor confidence:
  • Extending the Renewables Obligation beyond 2011 − investors evaluate projects over a 10 to 20 year life and need maximum visibility of the revenue stream over that period. The Minister undertook to consider RPA’s suggestion for the quotas to be ‘rolled forward’ ten years ahead.
  • Active involvement of the DTI in encouraging electricity supply companies to offer longer term Power Purchase Agreements.
  • Increasing the size of the Obligation so the 10% target set by Government is more likely to be met.
The RPA made further proposals to maximise the benefit of existing Government measures. “At present renewables are creating an unexpected cash pile in the Government’s coffers”, said David Fitzherbert, a leading developer of renewables projects. “This must be recycled back into the industry, and we have suggested ways of doing so”. The RPA pressed also for increased competition, by allowing more companies to trade and redeem Renewable Obligation Certificates.

The Energy White Paper published in February set ambitious objectives for the growth of sustainable energy, which accounts for less than 3% of electricity today, but is slated to grow to at least 20% by 2020. “This explosive growth will need the full backing of the equity and banking sectors”, said Philip Wolfe, “and we are pleased to see Government recognising that they need to act to reduce the perceived political risks in this area”. The Association invited Mr Wilson and Patricia Hewitt to address a City seminar on the subject.

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Press release/030312FinanceWilson.pdf Download Acrobat ReaderDownload Acrobat Reader 
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Coverage in the guardian
www.guardian.co.uk/business/story/0,3604,912955,00.html
 
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