Energy Engineering 47
My most recent writing for Energy Engineering includes the Issue 47 cover feature on transmission specialists ABB alongside features on an innovative energy capture technology and Bombay Sapphire’s new BREEAM Outstanding distillery.
I also wrote the issue’s ‘Viewpoint’, the magazine’s leading comment piece, in which I looked at the clean energy industry’s response to the early activity of the Green Investment Bank:
From anticipation to uncertainty to fanfare: that’s a rough trajectory of the Green Investment Bank’s reception (GIB) from its mooting to its eventual launch in November of last year. The GIB, which was seeded with an initial fund of £3 billion, claims to be the first of its kind in the world. Nevertheless, despite the promise of access to investment, the renewable energy and low carbon industries were not completely sold on the GIB; it’s too bureaucratic said some, it simply does not have enough money to make a difference thought others. However, the majority of the industry seemed placated, for the moment at least, when the GIB did finally heave open its vaults and began to invest in sustainable infrastructure projects in late 2012.
So the question is, how’s progress? Figures released by the GIB in May reveal that the institution has directly committed £635 million across 11 transactions. Furthermore, the bank suggests that each pound of investment from the GIB has mobilized three pounds of private sector funding; therefore the £635 million has leveraged a total investment value of approximately £2.3 billion.
Fantastic news one might imagine and proof that the GIB is making a meaningful impact on the UK’s low carbon industry. However, the renewables sector is still split over the priorities of the GIB. When I spoke earlier in the year to the Bank’s chief investment officer Ian Nolan, he explained that the GIB’s initial ‘priority areas’ would be offshore wind, energy from waste and energy efficiency. Of the investments made so far only two have been in the offshore wind sector compared to five that support waste or biomass projects, including a £100 million investment to enable Drax, one of the UK’s largest coal-fired power stations, to convert some of its coal boilers to wood and other biological materials.
Environmental pressure group Friends of the Earth has criticized this prioritization of biomass saying that it could lead to the unsustainable use of wood. The Renewable Energy Association, an industry body for UK renewables companies, conversely, has argued that biomass used in the UK comes from sustainable sources.
Whilst converting fossil-fuel power stations to burn biomass will certainly see a reduction in greenhouse emissions, there does appear to be a sense of disappointment in certain parts of the renewables community that the GIB has so far been reluctant to back more nascent sectors, such as wave and tidal, that struggle to access private sector funding but have the potential to contribute significantly to the green economy.
“The projects we are supporting demonstrate the full breadth of the opportunity ahead as we build a greener economy; from energy efficiency in the NHS to getting energy from food waste to building a dynamic market in offshore wind. These projects are good for the environment, good for growth, and all funded on commercial terms,” says GIB chief executive Sean Kingsbury.
Nevertheless, despite his words, a more diverse investment portfolio would surely win over a greater proportion of the renewables industry to the Green Investment Bank project. It is good news that investment is up and running and particularly pleasing that GIB funding is indeed helping to leverage the private sector funding which had previously been hard to come by. Given its solid start, my question is whether it is already time for the GIB to look beyond its priority sectors to support other areas of the low-carbon industry that, at a pivotal moment in their development, might so greatly benefit from the Bank’s support.