I am delighted to be invited to speak at this launch event, and not just because it has the magic politician’s word ‘manifesto’ in the title!

Over the past 50 years, in all walks of life, we have seen technological advancements almost beyond imagining.

And power generation is no different. In the 1980s power stations were built on a scale to supply entire cities.

Then came the introduction of combined-cycle gas turbine plants, which made smaller powerplants more economic.

CHP plants were developed to provide heat and electricity to industrial sites.

Mini turbines came onto the market to supply heat and electricity to single blocks of flats.

Now we are looking at generation for individual homes, i.e. microgeneration. Part of our vision for 2020, as set out in the Energy White Paper, is for much more diverse, local energy generation with fuller connection to the distribution network. We expect to see more micro-CHP, micro-wind, micro-hydro, PV and fuel cells installations, supplying individual customers and buildings and exporting energy to the grid.

Let me describe how microgeneration fits into our overall energy policy.

I am sure that all of you here, certainly those that have seen an advance copy of the manifesto will be, are aware of the Governments 4 main energy policy goals –

• Reduce carbon dioxide emissions by some 60% by about 2050
• Ensure reliable energy supplies
• Promote competitive markets in the UK and beyond
• Ensure that every home is adequately and affordably heated.

Microgeneration has the potential to make substantive contributions to the all of these goals.

With most microgeneration being provided by either renewable energy sources or by micro-CHP, there would seem to be enormous potential for reducing carbon emissions.

Widespread adoption of microgeneration would also help the overall reliability of our energy supplies by diversifying the sources from which electricity is obtained and reducing demand on the National Grid.

Efficient microgeneration technologies that reduce carbon emissions and remove the need for households to pay regular energy bills would, of course, contribute to the reduction of fuel poverty, if the upfront costs can be defrayed.

It is perhaps not immediately apparent how microgeneration would help to promote competitive markets.

Nevertheless ensuring a level playing field for all technologies is an important component of keeping markets competitive.

So – we all agree that microgeneration has a key role to play in the Government’s energy policy.

But what are we going to do about it?

Well, there is already a lot of work underway.

In 2001 we set up the Distributed Generation Co-ordination Group with a workstream dedicated to microgeneration issues.

We have been working with OFGEM to address net metering and other grid connection issues.

We are supporting Carbon Trust’s microCHP field trials.

We have funded PV installations to the tune of £25M through our Major PV demonstration programme and a further £10M through the Large Scale and Domestic Field Trials.

We are also providing £10M to support Household and Community Renewables through our Clear Skies initiative.

In Budget 2004 the Chancellor announced the Government’s willingness to introduce a reduced rate of VAT for microCHP, taking into account the findings of ongoing field trials, and a reduced VAT rate for ground source heat pumps.

And to demonstrate our commitment on a more immediate level, DTI has installed PV panels on the roof of our Insolvency Services building.

I am also aware of the calls for an extension of both the Photovoltaics Major Demonstration Programme and Clear Skies to give sufficient time for the development of a Low Carbon Buildings Programme.

The Government has acted on these calls and I am pleased to announce today that we will be providing a further £6M for the PV Major Demonstration programme and £2.5M for Clear Skies to enable the programmes to be extended for a year.

So there is much going on, yet there is always room for improvement.

We must support the UK companies who are driving forward this innovative industry. This is why the Government made a commitment in the Energy Act to produce a strategy for the promotion of microgeneration in the UK.

Over the coming months we will be working closely with interested parties to develop a suitable strategy before putting it to a full public consultation.

The launch of this manifesto could not have come at a better time.

It provides a sound basis for the wide-ranging debate on the issues around microgeneration that it will surely provoke.

The manifesto itself is extremely well written and puts forward some interesting ideas.

We will be carefully considering all of them in the preparation of our strategy.

Microgeneration is very much part of our vision for the future of energy provision. I look forward to working with you to help turn that vision into reality.