The government is preparing to issue extended targets for a key green energy certification scheme before Christmas -- two years ahead of schedule -- in a bid to address industry complaints that current policy stymies investment in alternatives to oil and gas, sources said Friday.

Under the Renewables Obligation Certificate (ROC) programme, companies are allocated targets for power generation from renewable sources such as wind and solar energy. Firms are awarded certificates for meeting and exceeding their targets, and can sell excess ROCs to under performers.

Companies and associations linked to the expanding green energy sector have been piling pressure on government to update targets for the ROC scheme to give companies and other investors a longer horizon against which to plan and provide project finance.

Sources from two separate government departments said Friday those crucial targets were on track to be updated and extended before December 25, a dramatic shift from the original planned review in 2005-2006.

ROC targets are currently only set up to 2010. Industry analysts have argued that at least 15 years' visibility is needed to secure investment in new projects, but the sources declined to say what time frame would be applied.

Energy Minister Stephen Timms told AFX Global Ethics Monitor Friday that he had been made well aware that "there are issues about investor confidence and people will need some reassurance."

He noted a government report which argued for information on ROC targets beyond 2010 to be provided by the end of next year.

"I would certainly hope we could say something well within that time frame," he said

Timms denied though that a lack of longer-term visibility had already hampered the UK renewables market.

"Look at the huge level of response to the round two of offshore wind projects. I certainly don't think there's been any holding back yet."

"In a year's time though, I accept that that would start to be a constraint," he said.

Jonathan Johns, partner and head of renewables at Ernst & Young in the UK, said he would welcome any move to help unfreeze investment in the sector.

"It is fundamental to the health of the industry to extend visibility on ROCs," he said.

Ernst & Young last month compiled a report which ranked Britain third on a list of market places for renewable energy. The report though argued that the UK would "storm to the top" if it took measures to tackle the poor investment environment.

Increasing targets set for the next 15 years would match the project finance time horizon, it said.

Gaynor Hartnell of trade body the Renewable Power Association said that if new targets are announced this year as she now hopes, it would have "a really significant impact on investment."

"As things stand investment is likely to dry up within a couple of years, because there won't be enough visibility that ROCs will hold their value long enough to repay the lenders.

"As soon as the quotas are met, the value of ROCs falls off a cliff face, and that's why we need progress on this as soon as possible," she told AFX-GEM.

Renewable power is a crucial plank of Britain's energy policy. In line with its Kyoto Protocol commitments, the government has promised to provide 10 percent of the country's electricity supply from renewable sources by 2010.

It has also pledged to reduce carbon emissions by 60 percent in the period to 2050.