Deputy prime minister Nick Clegg today announced a £100m fund to support green infrastructure as part of a drive to attract inward investment into the country.
He was promoting the advantages of investing in UK low carbon infrastructure to foreign investors, alongside energy secretary Ed Davey and energy minister Greg Barker, at today's British Business Embassy on Energy at Lancaster House.
The initial funding of £100m is for two Non-Domestic Energy Efficiency (NDEE) fund managers, Equitix and Sustainable Development Capital (SDCL), and is being managed by the UK Green Investments (UKGI) team, based in the Department for Business, Innovation and Skills.
It follows a similar £80m investment in the small-scale waste infrastructure sector. Both funds are being invested directly by the government, on fully commercial terms, ahead of the launch of the UK Green Investment Bank (GIB).
The fund managers will be actively encouraging foreign and domestic investment in small-scale NDEE projects, alongside UK government funds. This will include investment in the smart grid.
The deputy prime minister Nick Clegg talked up the benefits of investing in the UK's green economy, and was at pains to emphasise that the government is unified in its desire to provide a predictable investment environment.
"The entire government is working within the carbon budget that sets the pace of decarbonising the economy," he said. “There is no one in government that wants to depart from that. Our challenge in government is giving you as much certainty as possible."
He said he heard loudly the message that investors want predictability. “A quarter of our budget deficit has now been paid off," he claimed. “If we have to sacrifice short-term political popularity for long term stability we will do that.
"Our greenhouse gas emissions frameworks provide an overall target, and we review how we're getting there every four years. The 4th carbon emissions budget is the boldest in the world," he stated.
Clegg cited the example of Air Products, which is today beginning a new renewable energy product that will power 55,000 homes, as evidence of the success of government policy.
“We seek nothing less than a clean, green, low carbon economy," he said. “Together we find ourselves at the vanguard of one of the most dynamic, most innovative, most important industries of our time; an industry whose breakthroughs and endeavours will shape our societies for years to come; an industry that will help us build a more stable, more sustainable, more prosperous world.”
Energy secretary Ed Davey described the biggest overhaul of the UK's energy infrastructure, and stated that the Government was still on course to deliver 18 GW of wind power and 16 GW of nuclear power by 2025, as well as new gas back-up.
Davey said the government would do everything it could to take the risk out of investment for overseas investors. The feed-in tariff contracts-for-difference would provide a guaranteed price, he said, in the most cost-effective way. He promised that the UK would remain a great place to do low carbon business.
He also said that the proposed electricity market reforms would be staged in such a way as to minimise risk. Policy challenges are created by the fact that low carbon technology is changing and coming down in cost all the time. "That is why, in terms of cost effectiveness, we are absolutely determined to follow the evidence" during the four-yearly reviews.
£20-£25bn investment is to be made in the next four years alone.
Davey also used the occasion to promote the £1bn competition for carbon capture and storage. He added that he believed that the Green Deal could attract up to £15bn investment in the domestic energy sector.
The focus today at the summit, which is to last two days, is on addressing the conversion, distribution and use of energy through the entire natural and industrial ecosystems, especially through decarbonisation. Other speakers include: Sam Laidlaw, chief executive of Centrica; Steve Holliday, CEO, National Grid PLC; Keith Howells, chairman of Mott MacDonald; and Humphrey Cadoux-Hudson, managing director of Nuclear New Build at EDF Energy.
In addition to this, several industry announcements are being made. £12m expansion plans are being announced by Closed Loop Recycling, of its pioneering food-grade plastic bottle recycling plant, the world's first that can handle both PET and HDPE bottles. This doubling of capacity will create the most advanced plastics purification facility in the UK, and is expected to create and safeguard 100 jobs.
Grupotec, the Spanish global engineering company, will say that it plans to expand UK ground and roof solar PV installations in the UK, creating nine jobs in Richmond, Surrey, while Power Electronics is to open a UK headquarters in September, creating four jobs in Reading.
The Green Investment Bank is expected to be fully operational later this year, subject to state aid approval. It is designed to accelerate private sector investment in the UK’s transition to a green economy, backing technologies such as offshore wind power generation, waste processing and recycling, energy from waste generation, non-domestic energy efficiency and support for the Green Deal.
Story: David Thorpe, News Editor