Here is a selection of comments on the provisions for low-carbon and renewable energy technologies and the launch of the Green Investment Bank.
Ahead of the Budget release on 24 March, RenewableUK, which represents the UK wind and marine renewable industries (formerly BWEA), called for the Government to:
- Create manufacturing super hubs around strategically positioned UK ports;
- Expand R&D facilities such as the New and Renewable Energy Centre (Narec);
- Invest £200-300 million pounds over the next 2-3 years; and
- Ensure the sector is properly capitalised by introducing a ‘Green Bank’.
Following the Budget announcements, Dr Gordon Edge, Director of Economics and Markets at RenewableUK, said: “RenewableUK has maintained that investment in ports at this stage will reap significant rewards in the future. We are pleased that the Government has taken this on board.
“This investment will enable the UK to compete with established ports in Europe involved in offshore wind farm deployment. It is smart money well pledged, as it will create a significant number of jobs by 2020 and help British businesses benefit from Round 3.”
He welcomed the Green Investment Bank, but warned: “It is important … that any ‘Green’ bank is seen as a catalyst for wider investment.
“We need to attract substantial capital into the sector, from a wide base of potential lenders and investors. This bank needs to be one piece of the funding package, without taking away responsibility from other finance institutions.”
Combined Heat and Power Association (CHPA)
The UK Combined Heat and Power Association (CHPA) welcomes the provisions for low-carbon technologies and the Green Investment Bank.
Graham Meeks, Director of CHPA, says: “The Green Investment Bank, if properly funded, could be fundamental in bringing forwards a range of projects where the market has difficulty in delivering.”
He adds: “The Government’s Energy Markets Assessment, published alongside [the] Budget, has identified the importance of capture of waste heat in delivering a decarbonised UK, and the roll out of district heating networks will in turn be vital in making this happen. Today there is no sustained capital funding framework for this flexible, low-carbon infrastructure, so the Green Investment Bank could provide a valuable route to deliver.”
Funding not certain, and not fast enough
Ben Caldecott, Head of UK/EU Energy & Environment Policy at environmental investment and advisory group Climate Change Capital, says:
“… any reforms must be completed quickly and investors that have committed capital under existing market arrangements should be protected, otherwise investment could dry up at exactly the moment it is desperately needed to ramp up.
“The proposed Green Investment Bank could help to get important projects off the drawing board. However, as the cash for it is dependent on selling off strategic assets in difficult market conditions, it will take many months or even years before the fund is able to make a meaningful difference. Unfortunately, this simply doesn’t fit with the urgency of the task at hand.”
Ensuring UK benefit
Simon Walker, Partner at law firm Taylor Wessing, says: “A consultation on the establishment of this bank will be held in the summer, and as always, the devil will be in the detail. One challenge facing the Government will be to ensure that companies funded by this bank create jobs in the UK – as opposed to other countries where the cost of manufacturing is far lower.”
Commenting on the RO support for biomass, Roman Webber, Head of Deloitte’s renewable energy team, says: “The proposal for grandfathering a minimum level of Renewables Obligation support for biomass projects at the point of accreditation is a positive development and a recognition of the problem. For many biomass projects this has been an area of significant uncertainty. However, there is a question over how these proposals will be implemented.
“We await with interest the Government’s consultation later on in the year on sustainability criteria for biomass used for heat and power. The content of the proposals and the minimum level at which the support will be set following this consultation will be the key to determining whether investment will be forthcoming.”