The Government’s initial £3bn investment in the Green Investment Bank (GIB) is not sufficient to accelerate the UK into a green economy, according to a survey of members of the renewable energy industry.
Over half of those surveyed did not believe that the Government’s GIB investment was high enough.
Meanwhile, difficulty sourcing sufficient levels of private sector investment was cited as the biggest threat to the development of renewable power generation in the UK.
The findings came from a survey of 50 members of the renewable energy industry at the All-Energy Exhibition and Conference in May 2013, and was conducted by development project ‘Invest in Cornwall’.
The GIB has indicated that 80% of its initial investments will be targeted at lower risk projects using existing technologies, according to Invest in Cornwall. The vast majority of those surveyed believed that this strategy is incorrect because this makes developing new technologies in the first tranche of investments a low priority.
Just over half of those surveyed said the Government should do more to subsidise investment in low carbon technologies. Those that did not believe the Government should do more to subsidise these technologies argued that the renewables marketplace should be allowed to operate in line with market forces and could be distorted by undue Government intervention.
Those surveyed ranked the top ten greatest threats to the development of renewable power generation in the UK:
- Difficulty sourcing sufficient levels of private sector investment
- Nimbyism (the public objecting to developments, such as the establishment of wind farms in their local area)
- Thriving oil industry
- Difficulties in driving down unit cost of renewable energy
- Lack of coordination between firms offering renewable solutions
- Smaller firms being crowded out of the marketplace by big multinationals
- Planning consent issues
- Consumers reluctance to pay more for their energy
- International competition for investment
- Lack of consumer demand for renewable energy
Julian German, Cornwall Council’s cabinet member for economy and culture commented: “While the £3 billion pledged to the GIB is a welcome start, it is disappointing there is not a greater emphasis on supporting cutting edge projects that are more difficult to underwrite through private funding, as widespread commercialisation of these technologies has yet to be realised.”
He added: “It would be welcome if the investment strategy adopted by the GIB evolved to adopt a greater focus on more innovative technologies, where we have the opportunity to develop genuine ‘world firsts’ that lead the renewables market in a new direction.”
Last month business secretary Vince Cable announced the GIB will be able to borrow up to £500m from a Government lending fund in the financial year 2015/16, the first step to shift the bank towards debt capital market funding. He also said the Treasury will support the GIB with £800m in 2015/16.
- The Confederation of British Industry has recently called for the Technology Strategy Board, which supports innovative technologies, to be better funded.