INDUSTRY ARTICLE
ENERGY BILL AND THE GREEN INVESTMENT BANK A POSITIVE POINTER IN THE RIGHT DIRECTION
With the recent publication of the Government’s Energy Bill and the official launch of the Green Investment Bank, the industry has certainly been given a substantial boost.
We have received many comments from various organisations so we have selected the most informative to give our readership a balanced view within the industry.
GREEN INVESTMENT BANK
Earlier this year the Bank was established as a public company, UK Green Investment Bank plc. Following state aid approval from the European Commission last month it is now operational as an independent bank and open for business.
In the period before state aid approval for UK GIB, investments have been made on commercial terms by BIS’s UK Green Investments team (UKGI). To date, UKGI has committed £180 million to specialist fund managers to co-invest equity in smaller waste infrastructure, energy from waste, and non domestic energy efficiency projects. Assets built up by UKGI have transferred to the UK GIB.
Department for Business Innovation & Skills Vince Cable, Business Secretary
“The Green Investment Bank - a key coalition pledge - is now a reality. It will place the green economy at the heart of our recovery and position the UK in the forefront of the drive to develop clean energy.
“Three billion pounds of government money will leverage private sector capital to fund projects in priority sectors, from offshore wind to waste and non domestic energy efficiency, helping to deliver our commitment to create jobs and growth right across the UK. Having the headquarters in Edinburgh is a powerful vote of confidence in the Union, and a testimony to our commitment to helping Scotland lead the green revolution.”
Edward Davey, Secretary of State for Energy and Climate Change
“The Green Investment Bank will help attract the capital required to allow the green economy to blossom, encouraging investors to market and kick-starting low-carbon and energy efficiency projects. In combination with our electricity market reforms, there will be lasting economic benefit as a result, with new expertise and jobs created, that will give the UK a competitive edge.”
Lord Smith, UK Green Investment Bank Chair
“The Green Investment Bank has the potential to be a game-changing component of the UK’s low carbon economy, and a profitable centre of excellence in specialist and renewable investment.
“Over the coming months and years, I am confident that our excellent team will put its many years of expertise to work on building the foundations of that sustainable economy, and facilitating the important investments that will ensure its long-term good health.”
www.bis.gov.uk REA Chief Executive Gaynor Hartnell
“We are pleased that the first investment is a bioenergy project. We hope that biomass and waste-to-energy – as well as offshore wind – will form a significant component of the Bank’s activity. It is important to get as much leverage as possible from the initial £3 billion and investment in a diverse portfolio of renewable technologies will be helpful. As the Bank’s funding expands in future, it would be fantastic if it could follow in the footsteps of the German state-owned bank KfW.”
www.r-e-a.net
Michael Moore, Secretary of State for Scotland
“The UK Green Investment Bank is now ready to have a real and positive impact on investment in our green and renewables sectors that will take them into new areas and opportunities. We have the best of both worlds: a headquarters in Edinburgh, at the centre of Scotland’s thriving businesses and asset management, coupled with a team based in London, the world’s leading financial centre.
“The next step is to put that expertise into action and mobilise the additional investment we need to take the UK towards a greener economy. This is the first bank of its kind in the world and this government has delivered it for Scotland and the rest of the UK.”
“The Bill provides welcome clarity on how CfDs will be allocated, reducing the financial risk to developers. We also welcome the move to set up a Government-backed body, or counterparty, to write the contracts. This will decrease risk and lower the cost of capital. On initial reading, there are some other terms which may need further clarification – for example we want to make sure that if any significant changes are made to the regulatory environment in the future, developers who’ve signed contracts should not lose out financially.
www.renewable-uk
Maf Smith, RenewableUK’s Deputy Chief Executive
“The opening of the Green Investment Bank comes at a crucial time for the renewables sector, the day before the publication of the Energy Bill which will set the framework for the entire energy industry for decades to come. Today’s unequivocal assurances on investment, from some of the biggest hitters in the Cabinet, provide further tangible proof that the renewables sector is regarded by those at the heart of policy-making as one of the main engines for growth. We trust that a similar message will be forthcoming in the Energy Bill so that we can deliver more than 88,000 jobs in the wind wave and tidal sectors alone by 2021”.
Dr Gordon Edge RenewableUK’s Director of Policy
“Now that we’ve been able to read through the long-awaited details, it’s clear that the Bill will create a strong framework for investment. RenewableUK is looking forward to refining those details with the Department of Energy and Climate Change during the Bill’s passage through parliament.
“So far this bill is on track and on schedule, but we can’t afford any slippage if we are to avoid a hiatus in investment around 2017, when the financial support mechanism switches from the Renewables Obligation to Contracts for Difference.
As mentioned in our last edition we will be introducing a new Finance Feature to the magazine and we look forward to bringing you advice and helpful information from our experts in future editions.
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www.windenergynetwork.co.uk
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