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The Government are vigorously encouraging the development of all forms of renewable energy including wind energy, both onshore and offshore. The main mechanism through which this development will be supported is the Renewables Obligation and the associated Renewables Obligation Scotland. This will oblige all licensed electricity suppliers in Great Britain to supply a specified and growing proportion of their electricity from renewable sources. The Obligation will create a long-term market incentive for renewables which taken with the exemption of renewables electricity from the climate change levy (CCL) and continuing support for NFFO projects, is expected to be worth over £1 billion by 2010.
The Government have put in place substantial direct funding specifically for the development of offshore wind farms. A total of £74 million has been allocated in the form of capital grants to support the development of this young industry. This fund of £74 million includes £25 million of the £100 million announced by my right hon. Friend the Prime Minister last March, £39 million from the DTI and £10 million from the New Opportunities Fund.
The Government have also recently consulted on the offshore consents process, and plan to bring forward a streamlined approach which should make it easier for project developers to get their projects up and running.
It is very encouraging that 18 projects for the wind farms successfully pre-qualified for seabed leases from the Crown Estate earlier this year.