Global warming fight 'jeopardised'

Plans for 18 new wind farms were announced in March

The government's plans to fight global warming are being jeopardised by its own new rules on buying and selling electricity, ministers are being warned.

The Energy Minister, Brian Wilson, is to be challenged in the Commons on Wednesday over the new system which, it is claimed, is causing major problems for wind energy and small power stations.

Andrew Robathan: Plans in jeopardy

New rules on the way electricity is traded in the UK were introduced in March and a House of Lords report is expected to say that without changes to the new framework attempts to cut carbon gas emissions wil be stopped in their tracks.

The rules were designed to drive down prices for the consumer, but critics say they have also made it more difficult to make money from the cleanest forms of energy.

Companies generating power from wind complain that they face heavy penalties because they cannot guarantee exactly how much electricity they will produce ahead of time.

And there has also been a collapse in the market for small power plants that use the heat from generators to warm homes and factories.

Crisis fears

Philip Jackson, from Slough Heat and Power, outlined the problems the rules are causing for his company, which operates the kind of combined heat and power plants the government plans to double in number by 2010.

"We have reached the situation where half of my plant is mothballed or shut down," Mr Jackson told BBC Radio 4's Today programme.

McCarthy says the rules have cut wholesale prices

"We are not able to use that capacity now to the benefit of the local community."

David Green, from the Combined Heat and Power Association, said several energy schemes were being withdrawn and others having their capacity reduced, meaning carbon dioxide emissions would rise.

"It's getting to a real state of crisis in the industry," he said. "There is a significant meltdown taking place now."

The new rules were composed by industry regulator Ofgem, whose chief executive, Callum McCarthy, said they had cut the wholesale price of electricity.

But he told the Today programme: "There is a problem, particularly about wind power, that it is unreliable and in energy production as in other walks of life people pay less for unreliable production."

Kyoto targets

The government has promised a major expansion of wind and combined heat and power technologies to help cut the greenhouse gases linked to global warming.

It wants to ensure that 10% of the UK's electricity comes from renewable sources by 2010 as part of its obligations under the Kyoto agreement.

But the Tory MP Andrew Robathan will claim in the Commons that the new electricity market is putting these plans in jeopardy.

The debate comes on the day the European Union publishes its proposals for ratifying the Kyoto agreement on dealing with climate change.