The UK’s official commitment to cleantech is strong and growing. In its official Renewable Energy Strategy, the UK set a target of deriving 15 percent of its energy needs from
In keeping with that ambitious goal, the new UK Prime Minister, Conservative David Cameron, has wasted no time in highlighting the importance of the cleantech sector. "I don’t want to hear warm words about the environment. I want to see real action. I want this to be the greenest government ever… I intend to make decisions put off for too long to fundamentally change how we supply and use energy in Britain… To give the power industry the confidence it needs to invest in low carbon energy projects," he said.
Here are my top 10 reasons why I believe the UK is a cleantech leader:
1. The UK Government has strong cross party political support for cleantech and climate change. The Government recently passed the Climate Change Bill with cross party consensus meaning that the three main political parties in the UK agree that climate change is a serious challenge. Moreover, the Climate Change Act sets ambitious statutory limits on carbon emissions requiring a 34 percent cut by 2020, and an 80 percent cut by 2050.
2. The UK is oozing with people power! There is great strength in the UK’s civic society. For example, BTCV, the UK’s largest environmental volunteering charity has 300,000 members. The BTCV last year launched the Carbon Army campaign – a widespread effort incorporating practical action by its members to fight against climate change. This follows in the steps of other initiatives from organisations including CAFOD, Christian Aid, Greenpeace, Oxfam, RSPB, Tearfund, WWF-U.K., Stop Climate Chaos Coalition and Green Alliance. These efforts have prompted legislative change in the UK such as a minimum level of 30 percent of carbon capture sequestration on new coal plants.
3. The UK is a hub for cleantech VC
finance. The UK has a long history of sustainable investing and consequently UK-based cleantech companies were the largest recipients of cleantech venture
investment in Europe in 2009 receiving $300 million (£193.5 million) in 63 VC deals. The UK is also home to many top tier cleantech VC firms including Consensus Business Group, Generation Investment Management, Virgin Green Fund, Zouk Ventures, WHEB Ventures, Carbon Trust, Impax, Environment Technology Fund, Climate Change Capital, Bridges Ventures, Aloe Private Equity, Ludgate Environmental and Doughty Hanson. Moreover, key to the UK’s cleantech prowess has been the existence of London’s Alternative Investment Market (AIM) which has nearly 100 cleantech companies listed on it.
4. The UK is well organised in its mission to create a low carbon economy. With groups such as the UKTI, which has a strong global presence through its network of deal makers, the UK is armed with the skills to transfer its cleantech companies and
technologies into its economy. Also groups like UKSIF have been true leaders in this respect – UKSIF’s aim is to ensure that the UK finance sector is the world leader in advancing sustainable development through financial services.
5. The UK is a global leader in offshore wind. Offshore wind in the UK will be one of the largest renewable deployments in the world. Peter Löscher, president and ceo of Siemens AG, said: "In the foreseeable future the wind power market in the UK will be characterised by major offshore projects." Siemens UK ceo Andreas J. Goss added: "The British Government has established attractive terms and conditions for investors in renewable energy. This applies in particular to offshore wind power." In the last couple of months, the Crown Estates gave out huge tenders worth £70 billion to wind companies to build offshore wind farms in the UK. Firms are moving quickly to take advantage of this: For example, General Electric announced plans to manufacture its 4 megawatt offshore wind turbine in the UK as the result of these incentives.
6. The UK has the world’s most attractive wave companies. The UK is one of the few countries in the world that has serious wave and tidal projects in development. Wave companies are attracting the interest of large utilities and corporate giants such as Vattenfall and Siemens who are partnering/acquiring/investing in wave and tidal energy companies in the UK. Scotland has amazing waves for harnessing energy and there are a host of best-in-class companies working on wave projects in Scotland, such as Aquamarine, Pelamis and Minesto.
7. The UK Government is planning on creating a giant green investment bank. The UK has set up a Green Investment Bank Commission which is an independent group tasked to advise the Government on how to best increase investment in low carbon infrastructure and technologies. The current Government openly backs the creation of a green investment bank which could provide funding in many forms such as
grants, equity co-investments, insurance projects, wholesale capital and long-term carbon price underwriting.
8. Beep beep! Electric cars are coming to the UK. The UK Government has launched a strategy to put electric and plug-in hybrid cars on British
roads by subsidising purchases by between £2000 and £5000. The initiative is part of the Government’s vision to promote low carbon transport over the next five years.
9. Cleantech is embedded in the UK academia. The UK is home to Imperial College London which is the number one cleantech university in Europe and one of the top three globally. The College has incredible global reach and impeccable R&D credentials. In 2010, Imperial has already inked many significant corporate partnerships including a £70 million, 10-year collaborative project with Qatar Petroleum and Shell International for the development of carbon storage technologies as well as a joint venture agreement with Rolls-Royce to develop lower carbon aero engines.
10. The UK has many exciting and innovative cleantech companies. Exciting and innovative UK cleantech companies include Isentropic, Aquamarine Power, Juice Technology, Nexeon, Integrated Environmental Solutions, Breathing Buildings, Bowman Power and Sterecycle.
So there you have it – the UK has cross party Government support for cleantech, people power, VC dollars (or in this case Sterling), and solid base of human capital which are all the key ingredients which make it a global cleantech leader.
Shawn Lesser is the president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies and M&A. He is also a founder of the GCCA Global Cleantech Cluster Association.