Green energy industry asks for £500m cash injection to meet targets

The renewable power industry has warned that it needs £500m from the government over the next two years if it is to help ministers meet energy and climate change targets. More than half of the cash is for offshore wind power generation, while another part is required if wind and tidal power is to move from experimental to commercial application, the industry said in a budget submission out today.

The call for a large injection of public cash was made by RenewableUK, the lobby group previously known as the British Wind Energy Association, in a presentation to the energy minister, David Kidney.

Maria McCafferty, chief executive of RenewableUK, accepted it was a "huge amount of money" at a time when public finances were severely dented. But she said it would pay dividends for years to come, adding: "The returns are very, very significant and, frankly, I don't think there is a better option at the moment."

The call for new money comes at a time of rising disquiet in some quarters at the cost of the "green" revolution, with even some environmentalists questioning the cost of the planned new feed-in tariff which is meant to encourage homeowners to put small-scale wind turbines and solar panels on their roofs. RenewableUK pointed to the example of Denmark as a country that had reaped the benefits of giving strong support to a new industry, in particular onshore wind. Ministers had injected £1.3bn into a sector that is now producing revenues of £2.3bn annually.

McCafferty said venture capitalists were "beating on the door" to invest in the clean technology sectors. The industry needs government subsidies until it was able to stand on its own feet, she argued.

Even in the tidal arena, which is a long way behind wind in commercial terms, there are encouraging signs of interest with big names such as Siemens of Germany and Vattenfall of Sweden buying up equity stakes in wave power businesses.

The budget submission called for up to £300m to be invested in offshore wind facilities, technologies and "intellectual infrastructure". Wind operators want to see a capital grant programme to support testing and the establishment of a "green bank" to channel new funding into the wider renewables sector.

RenewableUK is also calling for £30m for research to resolve conflicts with the aviation sector, which is said to be holding up wind power projects. A further £15m is required to aid the Ministry of Defence with radar problems caused by similar developments. The remaining £150m would go to tidal and wave schemes.

The budget submission was not just about money. It also raised a considerable number of concerns including "punishingly high" network charges for remote generators and the way the Offshore Transmission Owner (OFTO) arrangements would work. "The currently envisaged application of this [OFTO] system will result in a gap in orders to the industry ... the hiatus will also mean that the UK is behind the curve necessary to meet 2020 targets," RenewableUK said.

Kidney, who was attending a RenewableUK tidal and wave conference, did not comment on the budget requests from industry but said that the government remained fully committed to its low-carbon industrial strategy.

This article first appeared on the Guardian

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