A “chilling” of investment flow into green energy projects in the near term could be prompted by the delivery timetable of the Green Investment Bank (GIB), the vice president of an environmental investment group has warned.
Appearing in front of an environmental audit committee evidence session, Climate Change Capital vice president James Cameron warned: “I’m all for trying to complete a task so that what you’re finished with is fit for the purpose, but delay is not helpful and the more time we spend discussing what could be, the less time we’re spending channelling capital into the solution. And, in fact, there is a chilling effect on investment flow as people wait in expectation of something coming through called the Green Investment Bank. So, that’s the balance to be struck.”
According to the department for energy and climate change (Decc) structural reform plan, the GIB is due to be established by September 2012. However, Cameron explained that following the publication of that deadline: “We are stuck, if that’s the right word, with that timetable.”
He added: “We have to be absolutely ready at that point. We need a slate of investments ready. We need a mandate sorted out.”
GIB commission chairman Bob Wigley explained the “chilling effect” in further detail: “The [GIB commission] report does identify that in 2009, net new investment in clean technology in the UK was about $12 billion USD.
“We are certainly not saying that the effect of a delay is to risk the whole $12 billion, but clearly that at least gives you some scope around the potential for the chilling effect, if I can put it that way. Because investors will naturally say, ‘Well, if a GIB is coming, since we don’t know what degree of subsidy it might involve, we’d better wait because otherwise we might invest now and there might have been better terms available later, so we’ll wait’. That’s the risk.”