Today’s publication of the Centre for Cities annual city index makes for interesting reading. The report, which ranks the economic performance of cities up and down the UK, find that while many are bouncing back quickly from recession, the recovery is likely to be unevenly spread across the country.
Certainly, Hull’s civic leaders and its residents had cause for celebration last week. The UK’s first offshore wind turbine plant is to be built there after Siemens, the German industrial group, announced that the city was its preferred site for a new factory. The plant, which would be the first to make 6MW turbines, is expected to be double the capacity of today’s biggest - and higher, at 150 meters, than all but nine buildings in the UK.
This is just one example of how green business has the potential to generate the significant economic growth and jobs that the UK so urgently requires.
Regrettably, it is far from certain that this announcement will act as the catalyst for similar investments that utilise the UK’s deep profile of natural resources. Recent research from Ernst & Young suggests confidence that the coalition government will enable the growth of the UK’s cleantech sector over the next 12 months has fallen sharply since the Comprehensive Spending Review and electricity market reform announcement last month.
The study – which surveyed 529 UK-based corporates, financiers and cleantech companies over the past three weeks – found that just 13% of respondents believe the coalition will establish the conditions for success in the cleantech sector in 2011. This compares to a figure of 38% from a similar survey undertaken between August and October last year.
Doubts over whether effective financing frameworks will be in place in 2011 to support growth in the cleantech sector have also markedly increased. The survey found that only 12% believe the right frameworks will be in place, compared to 36% originally.
Furthermore, the survey also found that fewer people (51%) now believe that UK investment in clean energy and clean technology will increase in 2011 compared to 2010, a fall of 10% from the original survey. And just 7% expect there to be sufficient investment in 2011 to give the UK competitive advantage, compared to 17% in the earlier research.
These results are a wake-up call to a government that had set out to be ‘the greenest ever’. Although the CSR left the clean technology sector relatively unscathed, the market is less confident. This is because the government has not yet established a clear and long-term policy framework for cleantech that will unlock the investment needed to establish infrastructure and create jobs in such an internationally competitive sector.
The global cleantech market is at a tipping point. With money drastically limited, and as public sector job losses begin to bite, cleantech’s unique potential should be prioritised across Whitehall. DECC, BIS and HM Treasury should be working together to ensure it can deliver long-term economic growth, create jobs, energy security and cutting edge competitiveness to the UK economy as we transition to a low carbon more resource efficient world.
We need decisive action now or investors will deploy capital into more dynamic cleantech markets where they are sure the sector is going to be supported over the long term. It’s time to deliver.
Steve Lang is Ernst & Young’s cleantech leader in the UK and Ireland
