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Energy Sector

Mr. Stunell: To ask the Secretary of State for Trade and Industry what the total (a) direct and (b) indirect Government support for the energy sector, including oil and gas production, was in each year since 1990. [18831]

Mr. Wilson [holding answer 28 November 2001]: I refer the hon. Member to the reply I gave to him on 16 November 2001, Official Report, columns 918–19W. Direct support for oil and gas production is set out in the table.

Since 1998 the Government have also worked with the oil and gas industry through the Oil and Gas Industry Task Force, now PILOT, to identify and deliver the measures necessary to ensure continued profitable activity on the UK Continental Shelf. The industry has made clear to me that they see PILOT as playing a crucial role in getting investment back to 1998 levels. Capital expenditure on UKCS projects was near £3 billion in 2000 and looks set to be substantially higher this year, and oil and gas production remains at peak levels of 4 million barrels of oil equivalent per day.

Sustained Hydrocarbons Additional Recovery Programme (SHARP) and predecessor programmes:

Financial year£ million

(22) To date

Support for the development of new products and services and competitiveness improvement within the UK oil and gas supplies sector:

Financial year£ million

(23) Total

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Mr. McLoughlin: To ask the Secretary of State for Trade and Industry when she will reply to the letter of 22 October from the hon. Member for West Derbyshire on Harrington Generators International. [21471]

Ms Hewitt: The matters raised were the responsibility of the Ministry of Defence and my noble Friend the Parliamentary Under-Secretary of State responsible for procurement has written to the hon. Member.

Departmental Strategy Board

Mr. Key: To ask the Secretary of State for Trade and Industry if there will be engineers on her Department's Strategy Board. [21505]

Ms Hewitt: I am currently considering the criteria to be applied for the appointment of three non-executive members of the Strategy Board. I expect to make the appointments before 1 April 2002, and will announce them when they are made. We will be adopting an open and transparent procedure for making these appointments and I shall be making an announcement on this procedure in due course.

Export Credits Guarantee Department

Mr. Whittingdale: To ask the Secretary of State for Trade and Industry what the savings have been resulting from hedging the cost of interest make-up on fixed rate export finance loans offered by the Export Credits Guarantee Department in each of the last 20 years. [21976]

Ms Hewitt: ECGD's interest rate hedging activity protects against the risk of increased support costs arising from adverse interest rate movements under the Fixed Rate Export Finance (FREF) scheme.

ECGD began hedging its exposure 15 years ago, using interest rate swaps. During the previous five years, the total net cost of FREF interest support, without hedging, was £2,189 million. Over the following 15 years, up to and including 2000–01, the total net cost of support was £1,703 million, within which the net cost of interest rate swaps was £319 million. The yearly breakdown of net swap costs over the period was as follows:

Year£ million

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Future outturn will depend on future interest rate movements and business volumes.

Matthew Taylor: To ask the Secretary of State for Trade and Industry what assessment she has made of the reasons for which the annually managed expenditure of the Export Credit Guarantees Department has risen. [22195]

Ms Hewitt: Annually managed expenditure (AME) for the Export Credits Guarantee Department has risen due to the extra cost needed to unwind interest rate swaps. These swaps were used to hedge interest make up (IMU) costs on fixed rate export finance loans and commitments being guaranteed by ECGD. These loans are now being refinanced using direct funding from HM Treasury, as this produces greater value for money in terms of cost and hedging uncertainty. AME estimates have risen as the cost of unwinding swaps in the financial markets has increased since the AME forecast figures were last published at the time of the Budget 2001.

Mr. Todd: To ask the Secretary of State for Trade and Industry what recent assessment she has made of the impact of the processes of and terms offered by the Export Credits Guarantee Department on the competitiveness of UK aviation exports. [23283]

Ms Hewitt: The major aircraft financing support for Airbus and Rolls Royce is governed by the OECD Consensus Large Aircraft Sector Understanding Arrangements.

Officials at ECGD together with those from its European partners, Hermes (Germany) and Coface (France) have been reviewing their products which are applicable to this agreement and intend to announce new products by 30 March 2002.

This review and product development has been carried out in consultation with the major manufacturers and they are broadly happy with progress to date. These products as a package are intended to match those provided to Boeing by the US authorities.

Together, the three Export Credit Agencies which provide support to Airbus and Rolls Royce continue to match the needs for support placed on them by these manufacturers especially since September 11 this year.

Tom Brake: To ask the Secretary of State for Trade and Industry (1) what power projects planned in (a) the Philippines and (b) Thailand, the Export Credits Guarantee Department has agreed to support; and which UK companies are involved; [23282]

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Ms Hewitt: In the Philippines ECGD has provided support for the following power project.

Year/description UK investorInsured amount ($ million)
Overseas Investment Insurance for San Lorenzo Project: 500 MW gas fired combined cycle power stationBritish Gas (BG Group plc)122

In Thailand ECGD has provided support for the following power projects:

Year/description ExporterContract value (£ million)
Mini Hydros for Provincial Electricity AuthorityBalfour Beatty9
Pluak Daeng substation for the Electricity Generating AuthorityVa Tech Reyrolle7

ECGD has not currently agreed to support any future power projects in these countries.

Combined Heat and Power Schemes

Mark Tami: To ask the Secretary of State for Trade and Industry (1) what proportions of energy supply is supplied by combined heat and power schemes; [22332]

Mr. Wilson: The available information is as follows. CHP statistics were not compiled on an annual basis before 1993.


Proportion of UK gross inland energy consumption from CHPProportion of electricity supplied (gross) by all UK generating companies provided by CHP


Digest of United Kingdom Energy Statistics 2001 Tables 6A (and corresponding tables in earlier Digests), 1.11 and 5.12

While electricity generated by CHP schemes has almost doubled since 1993, heat generation has increased by only 6 per cent. This is because gas turbines working at a

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higher power to heat ratio have increasingly displaced steam turbines (with lower power to heat ratios) as the main prime movers in CHP plant.

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