A green step forward?
Yesterday Nick Clegg's announcement on the Green Investment Bank tipped the Guardian's Green-o-meter from slightly worse than middle of the road to bang in the middle - hardly a great achievement.
Not even last week’s decision to accept the Committee on Climate Change’s fourth carbon budget, which commits the UK to a 50 per cent reduction of carbon emissions by 2025, was enough to significantly tip the scales after a year of fairly shaky environmental policy. Signing up to the budget doesn’t necessarily mean we know how we’re going to get there, but the Green Investment Bank has the potential to greatly facilitate our course towards this target.
So what news did we actually learn about the bank? We’ve got a date: the bank will be able to make investments from April 2012; we’ve got a potential chair - rumours suggest Sir Adrian Montague, previously chairman of British Energy and current chair of 3i; and we’ve got an idea of what the bank’s initial priories might be. In his speech Clegg noted that ‘possible early priorities for the Bank are offshore wind, waste, and non-domestic energy efficiency.’
This all sounds very good and it will no doubt provide assurance to wind turbine manufacturers like Vestas, that we have the market and regulatory certainty and the stable policy framework they seek before investing further in the UK. It may even help tip the balance on Vestas’ decision to go ahead with their proposed turbine factory in Kent. For this fact alone the announcements can only be welcomed.
But it’s hard not to feel these initial priorities are erring a little too far on the side of caution. Yes, it’s important that the government support off-shore wind, but compared to other more fledgling technologies such as tidal or wave power, this kind of power is comparatively well developed. If we are to meet our renewable energy target of 15 per cent of energy from renewables by 2020, we can’t rely on wind alone.
Tidal power has the potential to provide around a quarter of the country’s electricity, with 100 per cent reliability. Wave power could grow into a sector worth over £2bn, according to experts. However high capital costs and the investment risk due to the developing nature of these technologies mean that government investment is critical to realising the potential of the marine sector. We've already lost the marine renewable development fund, worth over £40 million; so let's hope that the government can use the Green Investment Bank to turn our marine potential into reality.