There is a danger there could be a “lost generation” of renewable energy technology businesses if investment levels in the sector are not maintained, The Carbon Trust has warned.
Investment in clean energy start-ups dropped off sharply as the global financial crisis developed. The trust warned that businesses in the renewables sector, especially those about to begin capital-intensive activities such as manufacturing, faced difficulties in attracting financial support in the current economic climate.
Adam Workman, a partner at CT Investment Partners, which advises Carbon Trust Investments, said a tail-off in finance for such firms that began in 2008 had continued this year. “There’s a real danger that we will get a “lost generation” of technology businesses that fall behind because of a lack of investment,” he said.
“That’s at a time when the global market is starting to adopt these technologies – so it’s a period where we need to accelerate growth rather than seeing the economy acting as a brake.”
The Carbon Trust is continuing to invest in green technology businesses such as Whitfield Solar, which received almost £3 million in fresh funding to allow it to ramp up production last week. Workman said the trust was working to provide capital for businesses like Whitfield and raise money from syndicates of investors.
“The issue renewable energy companies are facing is they are capital intensive-businesses moving into manufacturing and early sales, and are struggling to raise finance at the moment.” He added that there was some concern that the UK would fall behind competitors abroad if investment was not increased. “I think our biggest concern is we are seeing the US, and, more recently, China and India starting to overtake Europe in the amount of investment in this area.” There were areas such as wave and tidal power and offshore wind that Britain had the potential to be a world leader in with the right investment, he said.
Workman said he was confident that support for The Carbon Trust from government would continue next year even with wide-ranging spending reviews being carried out and a general election looming.
He said: “I think if you look at all parties and policies, there’s a general underlying support for low-carbon and clean energy technologies. In the current climate, all programmes are being looked at, and justifiably so. But I think there will be support for a range of low-carbon activities.”
© PE Publishing, 8 December 2009
