First published in Cleantech magazine 2011 Issue 3. Copyright Cleantech Investor Ltd
In the aftermath of the Fukushima disaster in Japan, energy policy is high on the agenda for governments around the world. Germany has taken the decision to close down its nuclear energy industry entirely. As a manufacturing powerhouse – with a high energy requirement – this has broad economic repercussions.
We have made the point on many occasions that policy measures promoting cleantech are typically driven by the desire for energy security as much as the need to move to lower carbon energy sources. Securing a reliable supply of energy is a fundamental requirement for economic development.
With respect to the UK, John Cridland, Director-General of the Confederation of British Industry, pointed recently to the danger of an energy policy which prices out energy intensive businesses. Speaking at a Climate Change Capital event hosted by Norton Rose (the same event at which Deputy Prime Minister Nick Clegg outlined more detail about the UK’s Green Investment Bank), Cridland emphasised that the UK’s aspiration to be a leader in the renewables industry requires the country to become a manufacturing base for renewables. Cridland pointed out that domestic companies are embedding low carbon techniques in their businesses – citing greener engines at Rolls-Royce, insurance products tailored to the specific risks of low carbon investors at Aviva and anaerobic digestion plants installed by Adman. He also pointed to overseas companies which have UK bases and are active in building the low carbon economy – such as Ford, Siemens or GE. Cridland emphasised that electricity market reform is important – to secure cost effective energy – alongside the measures of the Green Investment Bank to attract energy intensive industries to locate in (or remain in) the UK.
Without getting electricity market regulation right – i.e. without getting prices right – Cridland foresees a danger of pricing out energy intensive businesses – or, as he put it, of “robbing Vince to pay Chris” (a reference to Vince Cable, the UK Secretary of State for Business Innovation and Skills and Chris Huhne, Secretary of State for Energy and Climate Change).
The lead feature in this issue of Cleantech magazine discusses the prospects for cleantech after Fukushima. Irrespective of the role of nuclear in Japan, Germany or elsewhere, cleantech is growing rapidly. Clean Edge statistics project that the next decade will see further massive growth in cleantech around the world.
This issue also includes a feature on technology developments in offshore wind – ‘The Giant Wind Gamble’. The UK aims to lead the world in this potentially massive sector. However, as Cridland points out, “there is as much risk as reward in being a pioneer”. Policies to incentivise renewable energy deployment must be complemented by policies to attract renewables manufacturing industry.
Scotland’s First Minister Alex Salmon, speaking by video link to All-Energy 2011 in May, announced an ambitious new target – for 100% of energy consumed in Scotland to be generated by renewables by 2020. We’re going to use increasingly more energy generated from renewable sources in years to come, both in Scotland and around the world. Targets for renewables are valuable – but the big question remains: where will the cleantech manufacturing bases be located? The race is on to create the cleantech jobs and build the cleantech economies of the future. Energy policy needs to fit closely with broader economic policy on business development.
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