The UK green sector's leading influencers and decision-makers have given a mostly positive, yet cautious, reaction to the Government's four-year spending plans.
In response to the Government’s announcement on the Green Investment Bank following the Comprehensive Spending Review announced today, Jo Butlin, Vice President Retail at SmartestEnergy, the UK’s leading purchaser and supplier of electricity from the independent generation sector, said: “The decision to start the Green Investment Bank with just £1 billion budget is hugely disappointing.
“This is less than one sixth of what most experts believe is necessary to deliver the green energy revolution this country so desperately needs. We will have to wait and see whether this is an actual bank, with full money raising and lending powers, or just a grant making fund which could be cut at any time.
“There are numerous energy entrepreneurs in the UK with projects stuck in the pipeline as they wait for credit financing. The Green Investment Bank could have been just the mechanism to unlock these projects. From the statement given today, it appears the Government would rather see them stay where they are.”
However, Andrew Raingold, Deputy Director of the Aldersgate Group, the leading influential business coalition, said he was in support of the programme,
He added: "We welcome the Chancellor's announcement to put the Green Investment Bank at the centre of the government's plans to invest in the country's future.
“With the intention to build on the £1 billion of direct funding through other sources, the bank's capitalisation could reach the £4 to £6 billion recommended by business leaders and independent analysis.
“If the institution has a remit to issue bonds and leverage capital at scale from the private sector, it can significantly reduce the massive financing gaps for green technologies over the next decade, stimulating growth and jobs."
The announcement of a Green Investment Bank holding an initial £1 billion of funding intended to support environmental projects, including renewable energy and energy efficiency, has been cautiously welcomed by RenewableUK.
RenewableUK’s Director of Policy, Gordon Edge said: “The announcement of the Green Investment Bank is an important signal of the Government’s commitment to developing a low-carbon economy.
“However, it’s important to recognise that at the proposed level of capitalisation the GIB will not have sufficient funding to support the hundreds of billions of pounds of investment necessary to construct the energy infrastructure the UK will require over the next two decades. It’s crucial that a stable policy framework is put in place to secure that investment from the private sector.”
Juliet Davenport, CEO of Good Energy, the UK’s leading 100% renewable energy supplier, said she was pleased by the announcement of the continued support of the Feed-in Tariffs and the planned start of the Renewable Heat Incentive.
She added: “Good Energy welcomes the Government’s decision to maintain feed-in-tariffs at their current level until the planned review date of 2013. These tariffs are essential in driving renewable energy generation amongst consumers and businesses.
“FIT has a vital role to play in reaching the Government’s commitment to achieving at least a third of energy generation from renewable energy by 2020. Producing and using energy locally and making it a visible part of the local community means that people will value their energy more and use it less.
“Good Energy is also delighted that the government has chosen to support and incentivise renewable heat generation through a renewable heat incentive scheme, as planned. Currently, only 1% of total heat demand comes from renewable sources which the government clearly recognises needs to rise if we are to meet our renewable energy targets. Good Energy has proven that a RHI will boost this volume, having created our own RHI - called HotRocs - in September 2008 which now supports over 450 solar thermal users, resulting in a reduction in CO2 emissions of 270 tonnes a year.
RenewableUK, the country’s leading renewable energy trade association, stated that, given the range of cuts necessary to reduce the UK’s deficit, the part of the spending review dealing with renewable energy and the environment is “credible and considered”.
RenewableUK Chief Executive, Maria McCaffery MBE added: “Retaining the Ports Fund will give the industry a huge boost and establish the UK as a major force in renewable energy manufacturing. Signals from Government are positive that the £60 million will be retained as part of the ‘£200 million for the development of low carbon technologies including offshore wind technology and manufacturing at ports sites’ in part 1.4 of the Spending Review.”
RenewableUK also stated that if there are cuts to the Marine Renewables Deployment Fund, they should be followed by a new support mechanism for marine power technologies.
RenewableUK’s Head of Offshore Renewables, Peter Madigan added: “With many exciting new projects in the pipeline, including the new Wave Hub off Cornwall, it’s essential that the Government acts quickly to shore up investor confidence in our burgeoning marine power industry.
“The MRDF was intended to provide support for the first commercial arrays of wave and tidal power plants, and similar funding coupled with a long-term revenue support mechanism will be required if Britain is to meet its potential and become a world leader in marine power technology.”
Friends of the Earth's Executive Director Andy Atkins said: "The Chancellor's pledge for £200million to support low-carbon technologies and a new bank to help green industries get off the ground is good news - as is his clear commitment that it will be a bank not a mere fund - but it will need significantly more than the £1billion allocated to be effective.
"Slashing energy efficiency grants to some of the UK's most vulnerable people will send a chill into many homes, while cutting £300million on buses will have a devastating impact on services that the poorest people rely on most.
"We're pleased that the immediate threat to feed-in tariffs and the Renewable Heat Incentive has been fought off, but the Government must now work hard to mend investor confidence."
But the British Property Federation has urged the government to clarify its plans for the flagship Carbon Reduction Commitment after comprehensive spending review documents revealed a £3.5bn green stealth tax on business.
The Treasury said today that £3.5bn to be collected by the scheme over the next four years will be kept by the Exchequer, rather than being returned to companies in the form of recycling payments.
Liz Peace, chief executive, the British Property Federation, said: “The coalition said they wanted to simplify the complexities of the CRC and they have certainly found a novel way to do that. This will not however “remove the burden on businesses” as they claim, but ensure that the CRC will cost the wider business community almost £3.5bn more than it would have.
'Today's announcement contains little detail on the Government's full intentions in respect of the League Table, how allowances sales will function and to what ends the money gathered will be used. We urge the Government to clarify urgently how the revised Scheme will function, as people are making decisions today upon it.”
Commenting on the transport part of the spending review, the Campaign for Better Transport said that the Government must not use funding for a few big transport projects as a smokescreen for massive fare increases and cuts to spending on existing roads and services.
Chief Executive of Campaign for Better Transport, Stephen Joseph, said: “The Chancellor’s statement focuses on large-scale transport projects but the reality is cuts in funding for everyday transport. These projects should not be used as a smokescreen to cover up service cuts and rocketing fares on our buses and trains. Understandably, this will enrage people across the country who rely on these essential services.
“We are appalled at the Government’s plan to allow rail fares to rise so far above the inflation rate. Hard-working commuters who depend on the train face paying over £1,000 more for their annual season ticket by the time of the next election.
“These eye-watering rises are unacceptable at a time when we should be growing the railways in order to tackle congestion on our roads and reduce carbon emissions in line with Government targets.”
Reacting to the announcement of the £1 billion investment in Carbon Capture and Storage, WWF Scotland’s Director, Dr Richard Dixon, said: "It's great news that the plans at Kingsnorth have been killed off. A new coal-fired power station at Kingsnorth would have led to increased climate pollution. This would have been a disastrous setback for the UK given its need to decarbonise the power sector by 2030.
“We hope the same fate will befall plans to build a new 1.8GW coal plant at Hunterston in Ayrshire, which if it was given the go-ahead would result in a staggering 80 per cent of the plant's carbon dioxide emissions being uncapped.
“On the other hand, Longannet in Fife is the right sort of power station in the right place to do this kind of large-scale trial, potentially learning lessons which could help reduce emissions at thousands of coal power stations around the world.
“The Government must now make the most of this opportunity by giving the go-ahead for CCS demonstration at the existing coal plant at Longannet. Funding a retrofit project such as this will avoid lock-in to new and largely unabated fossil fuel power stations, will immediately reduce emissions from the outset and will provide a faster and cheaper way of demonstrating the feasibility of CCS technology."
Commenting on the Spending Review, Andrew Horstead, Risk Analyst at energy and carbon management specialists Utilyx said:“This government has claimed it will be the greenest ever, but what was announced in today’s Spending Review hardly gives this statement any credibility and will have investors running to the hills rather than committing the massive sums of money that are needed to drive the UK towards it climate targets.
“The only decision I can see that will raise a cheer is that the proposed Renewable Heat Incentive will go ahead with £860m in funding rather than being paid for by a costly levy on end users gas bills ”
“With a paltry £1 billion being promised for the Green Investment Bank, the question now is what signal does this send out to the private investor community to support the unprecedented investment required over the coming decade if we are to meet the UK’s climate goals?”
“The decision to alter the workings of the feed tariffs is a prime example of government changing their minds and will do nothing to encourage potential investors. We saw it with the radical u-turn in nuclear policy under the previous administration and so far it looks like we can expect the same from this coalition government. Changing the rules of the feed in tariffs just 6 months after the scheme was introduced will do nothing but alarm potential investors.
"Who is going to invest in renewable projects if there is a real possibility that future revenue streams will be changed in the future?
“If this Government is serious about being the greenest ever, it must provide further clarity and greater assurance that it will stick to and support existing policies to encourage further investment in green initiatives.”
adele, england around 1 year, 6 months ago