The Comprehensive Spending Review [CSR] confirmed that the coalition government will go ahead with plans for a Green Bank intended to help raise the £200bn that the country needs for energy infrastructure but there are doubts that it will be a success.
One of the key features of the proposal was that the Bank would raise debt from the private sector to leverage in taxpayer’s money invested in environmental projects. The Office for National Statistics maintain that any government money would have to be included on the government books thus inflating the national debt. As a consequence the Treasury scaled back the investment to £1bn and the Bank will not be established until 2013.
Critics argue that the sum of money is insufficient when balanced against the £80bn - £100bn funding gap between current energy generation and measures needed to meet the UK’s 2020 low carbon Kyoto targets. They also maintain that the Bank needs to be in place immediately.
In a recent survey conducted by the Brighton & Hove Economic Partnership and the Sussex Employment & Skills Board, leaders of green industries cited lack of clarity over government policy as the major barrier to growth.
With continuing confusion over the government’s nuclear energy policy and the ominous promise to “review” the feed-in tariff subsidy for renewable energy in 2014/15 to save £40m [established in April with a 25 year commitment], some key players in the sector have already lost faith in the UK as a key investment location for environmental industries. Last week Eon pulled out of a competition to build the first coal fired electricity generating plant with carbon capture and storage technology and US wind energy firm Fluor pulled out of a £1.5bn project in Suffolk losing £104m into the bargain.
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