Budget backing for biomass

Drax has submitted planning applications for two of the three power stations but has since warned that it needs more support from the Government before it can raise the 600m required for each plant.

The Chancellor said: "Biomass, such as energy crops or organic waste, offers a potentially significant source for renewable energy, subject to sustainability standards.

"Budget 2010 announces that the Government intends to 'grandfather' a minimum level of renewables obligation support for biomass installations at the point of accreditation, subject to consultation."

This could result in a longer period of guaranteed subsidies for biomass, which has attracted controversy over its impact on the food chain.

State support for biomass is in place for four years, in contrast to 20 years for wind power.

A spokesman for Drax said: "We await the detail of what is proposed, but our position remains that investor certainty is critical and this is the test we will apply when responding to the Government's proposal."

In yesterday's Budget speech, Alistair Darling unveiled more plans to help transform the UK into a low-carbon economy, which Yorkshire should be well-placed to benefit from.

He announced plans to create a 2bn 'green bank' to boost investment in major low-carbon infrastructure projects.

The investment would be supported by 1bn from the sale of state assets with match funding from the private sector.

A Treasury spokesman said the fund would "potentially benefit projects in Yorkshire and Humber, including renewable energy".

Rob Seldon, sustainability partner at Deloitte's Leeds office, said: "We welcome the launch of the new green investment bank.

"This shows that the Government recognises the need to take on early-stage risk in low carbon projects to help lead and accelerate private sector investment.

"In particular, we would expect the bank to make its investments in areas exhibiting market failure – such as potential blockages in the supply chains supporting low-carbon infrastructure.

"This will bring both jobs to the UK and speed up the deployment of decarbonising infrastructure."

In addition, Mr Darling announced funding of up to 60m to help develop port sites in a bid to attract wind turbine manufacturers to the UK.

The Government will launch a competition to choose the locations for funding which it said will support thousands of job in the wind energy sector and its supply chain

Tom Riordan, chief executive of Yorkshire Forward, said: "Anything that supports the development of offshore wind energy is positive, and Yorkshire and Humber has a lot to offer the offshore wind sector.

"We will be actively working to make sure that the Humber benefits from this announcement to ensure we can start to unlock significant economic and employment potential and enable sites within the region to be major centres for renewable energies."

Able UK and Associated British Ports, which own possible sites for wind turbine manufacturers, broadly welcomed the news.

Neil Etherington, a director at Able UK, said: "It's an innovative and potentially important announcement in that it is essential that we ensure the principle economic benefits of offshore wind turbine manufacturing are retained within the UK rather than those benefits being exported to competing facilities on the continent."