The UK government unveiled major spending cuts today, taking bites out of welfare benefits and other public programs while pledging to provide £2.2 billion pounds (about $3.5 billion USD) for renewable energy and carbon capture projects. The government also opted to preserve a feed-in tariff for solar power that industry insiders had feared would suffer on the chopping block.
Among the highlights for greentech in the four-year comprehensive spending review presented by Chancellor of the Exchequer George Osborne on Wednesday are £200 million for green energy development projects (including off-shore wind and port infrastructure for massive turbines), £1 billion for a financing program called the Green Investment bank, and up to £1 billion for a planned carbon capture demonstration project. As of this morning, when E.ON announced it will not continue in the competition for the carbon capture demo funds, Iberdrola SA is the only company still in the running for that project.
The spending review also includes £860 million for renewable heating incentives over the next four years, and the feed-in tariff is slated to hold fast until at least 2013, as previously planned.
The Green Investment Bank, according to the text of the spending review, is envisioned as a “radical new contribution to financing green infrastructure,” with an “explicit mandate to tackle risk that the market currently cannot adequately finance.”
The program’s public funding has been set for about half of the amount anticipated by some advocates and one-sixth of what others have said would be necessary to help keep the UK on track with its targets for reducing greenhouse gas emissions. Andy Atkins, executive director of the environmental group Friends of the Earth commented today that the Green Investment Bank “will need significantly more than the £1 billion allocated to be effective.” Osborne described the £1 billion as a “backstop” for the program, with sales of government assets expected to bring in “significant” proceeds and hopes for the bank to spur private investment.
For more on cleantech financing check out GigaOM Pro (subscription required):
- Report: Cleantech Financing Trends: 2010 and Beyond
- EPRI’s Solar Power Phrasebook — A Guide for Future Communications
- Report: Cleantech’s Third Quarter Growing Pains
Image courtesy of Flickr user phault.