Sales of renewable energy 'under threat'

Many companies are reviewing or cancelling renewable energy contracts, despite the high profile decision by retailer Marks and Spencer to buy renewable energy from Npower to cover nearly all of its demand.

Bruce Horton, environmental policy adviser at Water UK, said: 'The majority of water companies are giving serious consideration to whether its worth buying green energy at all.' He added. 'There is a danger demand will fall sharply.'

At issue is 'green' powers statues under Carbon Reduction Commitment (CRC).  In the CRC all power bought - or generated and used on site - will be treated as 'grid average' for carbon emissions.  The government maintains that any other approach would be 'double counting'

Retailers, property management companies and other participants in the CRC have said they are reconsidering green energy purchases.  BT was quoted saying the government was discouraging companies from switching to renewable energy.  It said its plans to build wind turbines on its sites were now in doubt.

Horton said Water UK would propose banding electricity purchases so that green power buyers would gain partial credit for their emissions savings.

A spokeswomen for Marks and Spencer said the renewables contract would work 'alongside the CRC' and that the company was satisfied the contract was commercially viable.

She said there would be an overall benefit to the company's business ' We have set very clear goals around emissions reductions' she said 'They are voluntary targets and commitments and we are not going to change them'