UK energy deal triples renewables subsidy by 2020

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Agencies: London, Nov 23 2012, 18:18 IST

British government support for low-carbon electricity generation will triple by 2020 after the energy and finance ministries reached a deal to end months of wrangling over costly reforms. Under the agreed Levy Control Framework, spending on renewable power generation will increase to 7.6 billion pounds a year in real terms by 2020, from the current 2.35 billion pounds, to reduce dependence on gas.

Divisions over spending plans between energy minister Ed Davey and finance minister George Osborne have delayed key agreements over energy policy at a time of painful austerity measures introduced by the government. The extra investment announced on Friday is intended to boost renewables' share of the energy mix to 30 percent by 2020, from 11 percent now.

The increase will also help to support new nuclear power and the commercial use of untested carbon capture and storage technologies, the government said. "This is a durable agreement across the coalition (government), against which companies can invest and support jobs and our economic recovery," Davey said in a statement.

The energy minister said that the agreement paves the way for the introduction of the Electricity Market Reform Bill next week, with some reforms up and running by 2014. "They will allow us to meet our legally binding carbon reduction and renewable energy obligations," he said, "and will bring on the investment required to keep the lights on and bills affordable for consumers."

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