As a solution to the global economic crisis, Gordon Brown has called for an international ‘Green New Deal’ in order to spark investment in new technologies and create jobs in the emerging renewable sector. In reference to F.D. Roosevelt’s economic plan to revitalise the US economy during the Great Depression the Prime Minister explained that he believes striving to evolve the UK in to a low carbon economy will create jobs while at the same time help the government to meet its climate change targets.

The British government has already set the target of an 80 per cent reduction in greenhouse gases by 2050 and have taken some measures to instigate this reduction. Overseeing this gradual change towards a low carbon economy will be the Secretary of State for the Department for Energy and Climate Change, Ed Milliband. The minister has already advocated government investment in renewable energy technology and research and was a key figure behind last November’s Energy Act which set out the main provisions for government funding for green energy and paved the way for the implementation of a feed-in tariff in 2010.

Despite these changes, some environmental lobbies and members of the renewable industry have criticized the government for not providing enough funding for green projects and not setting out a concrete breakdown of the feed-in tariff which will be necessary to attract investment as it has done for example in Germany. Spokesman for Friends for the Earth, Andy Atkins summed up the frustration in certain circles by commenting,

“We need urgent and decisive action, not more token gestures and hot air.”

Gordon Brown is confident that the green sector will provide some relief to the recession in the jobs that it creates, not just in the UK but globally and he was keen to make this point last week at a summit in London. The prime minister produced the results of an independent report which states that the renewable energy sector will generate around 400,000 new jobs within the next 8 years meaning that by 2017 1.3 million people will be involved in the renewable sector in the UK.

During his historic visit to Washington last week for his meeting with US President Barack Obama, Brown stated that it was imperative both for the economy and the environment that changes are made to the way governments approach renewable funding stating,

“We know that the more we are able to co-ordinate these measures internationally, the more confidence and certainty we will build and the more investment we will be able to bring forward.  That’s why I want to create a global ‘green new deal’ that will pave the way for a low-carbon recovery and to help us build tomorrow’s green economy today.”

Key to this shift towards a low carbon economy is the feed-in tariff which has already proved extremely successful where it has been implemented elsewhere. Members of the industry have already expressed the need for a tariff which is more than a token gesture and is able to attract investors through coherent, long term, viable contracts. Some have suggested that a rate of 50p per unit of kWh energy fed-in to the grid by renewable systems under 5 Megawatts would be sufficient to help Britain catch up with nations such as Germany where feed-in tariffs are now well established. The feed-in tariff rate is crucial as it will offset the cost of producing energy by renewable means by offering investors long term contracts with fixed rates for their megawatts production.

Andy Atkins of Friends of the Earth, regarding the summit and the need for government action on tariffs and project funding added,

“Today’s summit is an encouraging development, but ministers must grasp the scale of the challenge we face. We need urgent and decisive action, not more token gestures and hot air”.

Glass and plastic component manufacturer, Romag who specialize in the production of units to be used in photovoltaic technology have developed a product designed to recharge electric vehicles in public spaces using solar panels. The ‘PowerPark’ facilities will be located in areas such as supermarkets, petrol stations, schools, offices and airports and will generate enough electricity via their PV canopies to both charge electric vehicles and feed energy in to the national grid.

PowerPark, which is set to be rolled out first in the North East and then the rest of the UK has already secured a contract with OneNE, a regional development agency created to help projects such as this in the North East of England. The regional development agency will also help Romag to set up the UK’s first photovoltaic training and development park, in the hope that it will see the development of other renewable projects which will help contribute to the general move away from fossil fuels in the UK.

Although as yet, electric cars have failed to enter the national consciousness the industry hopes that in the next few years, based on the provisions set out both in the Energy Bill land by the newly created Environment and Climate Change Department, they will become much more popular after 2010. Many commercial renewable manufacturers such as Romag are also hopeful that the feed-in tariff (FIT) which is to be introduced next year will help them by offering them a fixed rate for the megawatts they feed-in to the national grid via their PV canopies. As has been practiced successfully in places such as Germany, the tariff helps manufacturers and investors alike as their revenue streams are protected by the rate paid for the megawatts by the energy companies. The additional costs incurred by the power companies in purchasing the expensive renewable energy are spread across the consumers in their monthly bills.

There are hundreds of businesses in the UK which, like Romag will be hoping that the government’s feed-in tariff is sufficient to spur the renewable industry in the UK the same way it has done elsewhere, in particular in Germany where tariffs have been highly successful in promoting investment in photovoltaic plant.

The renewable energy industry has warned that the renewable energy sector risks failing in its infancy if the proposed closure of the micro-renewables fund, worth £50m goes ahead. The possible loss of funds along with the news that feed-in tariffs will not be introduced until 2010 has concerned some members of the industry who have lobbied the government for essential funds, crucial to the development and investment in small, renewable installations.

Ed Milliband, Secretary of the newly formed Department of Energy and Climate Change announced that all funding for low carbon public sector buildings will be withdrawn from June 2009. The scheme, called the Low Carbon Buildings Program (LCBP) has, until now paid up to half of all costs incurred in the installation of micro-renewable facilities in public sector buildings and has been absolutely essential for covering the inevitable cost of installing renewable energy plant.

Philip Wolfe, Director of REA criticised the government proposal stating, “The government rightly talks about a green jobs revolution, but these initiatives will be strangled at birth if the companies that deliver them have no market in the meantime.”

Lobbyists are arguing that the government should continue the funding program at least until the introduction of feed-in tariffs in order that the industry, in particular manufacturers of heating units do not collapse. The proposed feed-in tariff will help renewable investors by guaranteeing a fixed, premium rate for power fed-into the national grid. The premium rate paid for the green megawatts will be paid for by existing power companies and will offset the expense of generating power by renewable means. In places such as California, Germany and Australia this scheme has been extremely successful as a way of attracting investment.

The importance of the LCBP and the vitality it provides to the industry was highlighted by Ray Noble, ex UK head of BP Solar, “Before, there was about £8-10m worth of funding per year. The LCBP nearly tripled the amount.”

In a show of support for the possible introduction of a feed-in tariff, the UK solar industry, led by the UK Solar PV Manufacturers Association has launched its ‘We support solar campaign’. Following last years Energy Bill, there is now a real probability of a coherent feed-in tariff law being established in the UK

The feed-in tariff is government legislation which attracts investment and promotes growth in the renewable energy sector by making it a financially viable option. This is done by guaranteeing a fixed, premium rate for energy fed-into the national grid from renewable energy suppliers. The added cost of producing energy by renewable means is therefore offset by the fixed rates that the traditional energy companies are obliged to pay for the green Megawatts.

The feed-in tariff contracts will provide small renewable installations (generally under 5MW) with a steady revenue stream and it is believed that this will help spread the ‘green’ message into communities. Around 30 MPs are now backing the take up of a serious feed-in tariff policy, as has been seen in places like Germany and California where they have been successful. The government has hinted strongly that they will be looking to mirror feed-in tariff systems implemented abroad and there is growing pressure both from leading renewable energy producers and environmental groups alike for their adoption in the UK.

Former UK government minister, Michael Meacher has given his support to the feed-in tariff and Environment and Climate Change Secretary, Ed Milliband by saying,

“Ed Miliband’s decision to introduce a feed-in tariff for solar PV and other small-scale renewable electricity technologies is potentially a real turning point for the UK solar PV sector. It gives the UK a vital new policy tool that should help to maximise the contribution from solar PV to our demanding renewable energy target.”