The slowing rate of investment in renewable energy schemes poses a threat to the UK’s targets for cutting greenhouse gas emissions, according to the chief executive of the Green Investment Bank.
Shaun Kingsbury, appointed to lead the Edinburgh-based and state-supported bank in October, said that this year is “critical” to establishing the UK as an attractive global centre for long-term energy investments.
He warned that the appetite of institutional investors was waning, adding the many billions of pounds targeted at renewables had so far generated only half the rate of carbon savings required.
He also challenged the UK Government to get its Electricity Market Reform proposals “right”.
“Getting the finer details of EMR right is vital in providing investors with the confidence they need to commit to financing the UK’s future energy infrastructure,” Mr Kingsbury said.
“In the wider global market place, I would expect the year ahead to see a continuation of difficult times in the clean energy business given the challenging global economic conditions.
“Investment levels have fallen in the past year after a period of rapid growth.”
He said he hoped that improved efficiency, innovation and falling costs in the renewables sector would work against “what looks to be a sustained trend of falling investment appetite within mainstream sources of finance.”
The bank, which is capitalised with £3 billion of taxpayers’ money, is constrained by European state aid rules, limiting it to co-investments and leading Mr Kingsbury to warn that the bank could not artificially prop-up a slow market.