The Green Investment Bank (GIB) commenced operations in October 2012 with a mission: “to accelerate the UK’s transition to a green economy and to create an enduring Institution, operating independently of Government.” The bank invests in commercial, green projects within the UK in partnership with other investors and lenders.
Eighty per cent of the £3 billion capital available has to be invested in providing support for “priority” sectors made up of energy from waste and waste recycling, the Green Deal that includes renewable energy technology such as solar panels, offshore wind and non-domestic energy efficiency. The remaining 20% can be invested in “non-priority” sectors that are renewable heat, marine energy, the capture and storage of carbon, biomass power and biofuels used for transport.
Invest in Cornwall, that is the county’s European funded inward investment service, has carried out some research with leading renewable energy industry experts in the UK*. This has revealed that there is a significant amount of scepticism as to whether the Green Investment Bank (GIB) will provide benefits that are considered to be of any real significance.
For instance, six out of ten renewable energy industry experts that took part in the survey were of the opinion that the £3 billion that had been made available to the Green Investment Bank (GIB) by the government was not enough to help the country towards achieving a greener economy over the next five years.
Another area of concern of some of these experts surrounded the investment strategy being adopted by the Green Investment Bank (GIB). As intimated above, 80% of the capital made available is to be invested in priority sectors with these being considered relatively lower risk schemes utilising existing technology. Only 21% of the renewable energy industry experts taking part in the survey felt that this was the correct approach considering that only a low priority would appear to have been given to assisting relatively new technology projects in the first batch of lending.
Fifty seven per cent of those taking part in the survey felt that the UK government should be more supportive of investing monies in low carbon technology. Those experts that did not agree with this were of the opinion that government intervention could distort the renewables industry and, therefore, it should really be left to trade naturally.
Some of the problems facing the UK in developing renewable power generation are:
- Sourcing adequate amounts of private sector investment
- Public objection to the likes of solar panel farms and wind farms
- The oil industry is doing well
- It is not easy to reduce renewable energy unit costs
- Issues with planning consent
- Consumers are not keen to pay more to have their energy supplied
- Consumers seem reluctant to show an interest in renewable energy
- Larger multinational companies “smother” smaller firms
Obviously, the solar photovoltaic panels industry features significantly within the renewables energy sector so it would be interesting to get the views of our readers on what this research has revealed.
*Research was carried out with 50 prominent renewables experts at the All-Energy Exhibition and Conference – 23-24th May 2013, AECC