“Beijing’s plans for renewable energy could blow a hole in Britain’s eco-industry”, wrote Sunday Times writer Danny Fortson (5/9/10).
I struggled to understand the angle of the story: surely we should be delighted to know that rather than more dirty coal powered plants polluting the atmosphere and choking China’s population, she is now investing in wind power with a vengeance?
By the end of last year, China already had an installed base of 25GW which is a fifth more than all of Europe. And by 2020, her government expects to generate 150 GW from wind turbines or 6 times more than the British target, many of which are installed on the sand dunes of Inner Mongolia.
But why the need to pit UK’s progress against that of the world’s second largest economy? According to the said article, there are currently 80 turbine manufacturers in China, including 3 of the world’s largest Sinovel, Goldwind and Dongfang. Britain has one, Clipper Windpower. If China can in future produce wind turbines, or indeed solar panels and other clean tech gizmos more cheaply than the rest of the world, it would “disrupt” the market place.
As Lib Dems, we have long called for the green road to UK’s economic recovery. And now in coalition we support the creation of a green investment bank though the details of its remit and reach have yet to be agreed.
Significantly just this week on 7 Sep, Climate Change and Energy Minister, Greg Barker enunciated his vision of London becoming the global hub of green finance and urged the City to be innovative in creating more financial products to finance this sector. There is according to industry experts currently an “equity gap” for clean tech companies. It is not so easy for start ups struggling to expand to take advantage of the low carbon boom to find support from angel investors or venture capitalists. The latter prefer safer investments such as management buy-outs or mergers of established companies than to take on riskier investments where working capital is needed, say, to build prototypes.
On a recent visit to the Carbon Trust, a not-for-profit set up to help UK companies reduce their carbon foot print, I learnt that there is in fact a very efficient and well focussed team there that helps entrepreneurs on their fast track scheme which helps entrepreneurs make the leap from risky start-ups to commercially viable investment opportunities. This project presently only costs £6 million a year and for every £1 they spend, the private sector puts in £12 – leveraging over £90m in private capital to date.
However funded by the Department of the Environment and Climate Change (DECC), I am fearful of the coming Comprehensive Spending Review and to possible future abolition of this scheme, without any replacement. There may be the possibility of incorporation within another Lib Dem Department, BIS, or even within the Green Investment Bank, but all of these are medium term options and in the meantime, our Government’s support to UK low carbon entrepreneurs is at risk, alongside our claims to be leading a green economy.
I believe there is still much we can still do here the UK, especially if we wish to be leading manufacturers and exporters of clean technology. We need to create an environment where the financial as well as the investment communities are incentivised to nurture and support the commercialisation of home grown clean tech companies.
And instead of fearing countries such as China leaping ahead of us, we should work to take advantage of their low manufacturing base as well as demand in order to stay ahead of the game and compete effectively in the global market.
Merlene Emerson is Parliamentary Spokesperson for Hammersmith and Chair of Chinese Liberal Democrats