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Budget 09 A lot of people are wondering how the British government can deliver colossal bank bailouts and pay rapidly-climbing dole bills - all the while collecting less taxes as people are laid off and companies founder - and yet still find money to subsidise green energy. Chancellor Alistair Darling has found a cunning way around the problem: he will simply raise electricity prices and channel the resulting cash into wind farms.

The process isn't described like that, of course. Mr Darling, presenting the Budget yesterday in parliament, put it like this:

This is described in the national dailies thus:

There are currently 300,000 households supplied by energy from offshore wind farms, but the Government has pledged to increase that to 3.1 million with £525 million investment ...

Mr Darling also found £45 million for small scale renewables like wind turbines on houses ...

It seems that even with the revenues shrinking, bills climbing and the government's credit running out, Mr D has managed to find half a billion from the public coffers for offshore wind: remarkable.

Well, it would be remarkable if it were true. But it's not. The public coffers contain nothing but a bit of paper reading "IOU £beaucoup trillions, G Brown", and in fact that half-billion will be found from the pockets of electricity users. You and me, that is.

The key is the phrase "funded through the renewables obligation". If we delve deep (page 148) into the Treasury pdfs which provide detail on Mr Darling's speech, we find what the government actually plan to do.

Budget 2009 announces a banding review with the intention of increasing the banding of Renewables Obligation Certificates (ROCs) from 1.5 to 2.0 for offshore wind projects meeting specified completion criteria if they place new orders in 2009-10, and then 1.75 in 2010-11. This is expected to provide £525 million support from 2011 to 2014, protecting 3 GW of proposed investment over the next two years, enough to power an estimated 2.8 million homes.

The Renewables Obligation scheme is the only reason there is any renewable energy in the UK at all. As renewable juice costs more to make than coal, gas or nuclear - and generally has the added disadvantage that you can't turn it on and off on demand - companies wouldn't normally be able to sell it.

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Next page: Wind farms aren't machines for producing electricity - they're machines for printing Renewables Obligation Certificates