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Posts tagged with: green new deal

Greece has recently gone through the greatest financial crisis to affect a member of the Eurozone since the introduction of the single currency ten years ago. With raging unemployment exacerbated by huge cut-backs in public sector spending, the Athens government spent the first quarter of 2010 faced by riots in the streets, a result of the financial crisis which is hitting the Greeks harder than anybody.

However, plans are afoot to revitalise the stricken Greek economy with the announcement yesterday that 12 billion euros will be invested in green projects in an attempt to create jobs in new renewable industries. In a press release issued by the Greek government, Tina Birbili the Environment Minister said,

“The ministry hopes the programme will decisively contribute to face recession and lead to dynamic economic growth”

Birbili believes that renewable projects could attract around 32 billion euros of investment from around the world creating up to 192,000 jobs. This will at least come as a glimpse of light in a country where unemployment is steadily on the rise and national debt is at an all time high. The EU bailout, funded largely by Germany expires in 2 years, by which point Greece will be hoping that the economy is back on track.

Both Gordon Brown and Barack Obama have been keen exponents of renewable energy as a means of kick-starting the struggling economies of the UK and US respectively. Sound bites such as ‘Green New Deal’ have regularly appeared in the press both sides of the Atlantic in a reference to the government projects of the 1930’s designed to boost recovery after the Great depression. It seems that Greece is going to follow this lead with a number of projects now in the pipeline.

Certainly, with Greece already falling behind other southern European countries with regards to its renewable energy uptake, the investment could provide the vital impetus needed to get the renewable energy industry in Greece on its feet. With targets of generating 40 per cent of its energy from renewable sources by 2020, they have their work cut out.


The Chinese National Energy Administration has announced via the state run newspaper China Daily that they will be seeking to produce around 15 per cent of all the country’s energy by renewable means within the next 10 years.

China, despite being criticised for its heavily industrialised, polluting economy and images of Beijing obscured by dense smog during the 2008 Olympic Games, the government is taking proactive steps towards reducing carbon emissions with measures that would shame certain other attendees of the Copenhagen climate summit.

With the growing realisation of the fallibility on basing the huge Chinese economy on fossil fuel imports which could become untenable within the next 25 years, the Beijing government is planning to spend billions of dollars in investing in solar and wind farm sites in addition to research projects which could keep China at the cutting edge of green energy generation.

Renewable energy generation grew by 1 per cent in China in the last 12 months with the government hopeful that figures will grow from the present 9.9 per cent to 15 per cent by 2020. The Chinese government is keen to diversify its economy as well as its means of energy generation with the dual purpose of slowing the effects of climate change and making the economy more robust in the face of any potential fuel crises which could arise in the near future.

In spite of passing legislation designed to have an immediate impact on renewable energy uptake such as the feed-in tariff, a mechanism to incentivise investment in green technologies, government spokesman Zhang Guobao is realistic about the timescales involved in such projects. Speaking to China Daily, Zhang commented that,

“Power projects take a long time to be up and running, and we are basically allowing five years to complete them although it is a 10-year program, otherwise, the facilities cannot be put into use by 2020.”

Zhang added, “It appears that some local governments approved energy-guzzling projects during economic crisis so only by fully implementing our energy saving regulations can we realize economic growth with less energy consumption.”

The British government’s commitment to green energy despite the political rhetoric has traditionally been written off as cynical pandering to the green lobby. Certainly, even with the creation of the impressively titled Department of Energy and Climate Change (DECC) under the leadership of Ed Milliband which was sniffed at as a mere spin operation, few took the government’s will to tackle climate change seriously. When the Energy Act was passed through parliament in November 2008 the wheels were set in motion for the introduction of the much hyped ‘feed-in tariff’ or FIT as it is often been abbreviated.

Those within the industry were all well aware that similar tariff mechanisms elsewhere have provoked massive investment in solar sectors which previously hadn’t been on the green energy map. The ‘We Support Solar’ campaign was created as a mouth-piece for industry members and environmentalists alike to voice the message that solar power is the most viable means of generating clean, affordable energy in the future but that this viability hinged on the introduction of a comprehensive and generous tariff rate. This last part was the main concern for campaigners who worried that the government would introduce legislation which would neither attract investment, nor render the industry economically viable. Fortunately, with the DECC’s announcement of the Clean Energy Cash Back legislation (essentially a FIT) it now appears that the UK will have a bright, solar future.

 A feed-in tariff is a mechanism whereby the government sets a law which guarantees a fixed, premium rate paid for electricity generated by renewable means. Traditionally, the benefits of solar electricity have been far outweighed by the cost of solar kits, installation and maintenance, something which has deterred investment and kept solar power as a low level, cottage industry in the UK. What the tariff does is off-set the obvious costs involved in the installation of solar plant by offering investors generous financial incentives for installing solar kit. The traditional energy companies in the UK will be obliged to purchase the solar energy at a price above market rates, the cost of this being spread over the consumers.

Even before the Clean Energy Cash Back announcement, the benefits to potential solar investors in the UK were being expounded. At the end of 2008 consultants, Ernst & Young reported that the UK had moved up to fifth place in a list of countries in an index entitled, Renewable Energy Country Attractiveness. Citing the impending introduction of the feed-in tariff and the relatively low value of Pound Sterling, the Ernst & Young report stated the UK’s rise in the index would continue as investors eventually cottoned-on to legislation changes designed to incentivise investors. It was therefore no surprise that heading the list was Germany whose own tariff legislation has often been held up as the example of how to create interest in unchartered territory for many investors.

Confidence in the future of the solar industry has certainly never been higher within the financial sector. The global financial crisis has highlighted the importance to many the need to diversify their investments and also seek viable alternatives to petro-chemical investment. In March 2009, the fund manager of Swisscanto, Pascal Schuler announced that oil and natural gas in particular would become unviable as investments within the next 20 years. Talking specifically about his green investment fund, Schular asserted that,

“Water, solar and wind energy are areas where we invest in the long-term, as there is an over-average growth potential when financing kicks off again. Banks will prefer them when they start lending.” Going on to add, “We will continue to invest in this segment but focus on companies which have a strong balance sheet and are able to survive this crisis”.

 A brief look at Google will show that there is now a real buzz around similar investments in the UK solar industry. Websites such as solarinvestment.co.uk are highlighting the excitement which currently exists in the young British solar industry, the future of which looks brighter than ever. However, confidence in the solar industry is not limited to those simply within the industry. Consultants and analysts are all putting across the message that solar installations are the most effective ways to offer consistent, high yields in tumultuous times for global financial markets. One such exponent of the solar sector is investment guru, Jim Mellon who has added his weight to the solar revolution. Mellon, has demonstrated his belief in the prospects for a solar energy future by investing in mining company ‘Emerging Metals’ which focuses specifically on metals required for the manufacture of components used in photovoltaic technology. Listed in the Times Rich List with a net worth of £500m, the financier who predicted the financial crash stated,

“Solar is genuinely clean, it ticks all sorts of zeitgeist boxes. Within five years, solar power will be as cheap as oil and gas without the subsidy. It will be bigger than the internet in five years”

Of course, whether the solar industry will be bigger than the internet in the UK over the next half decade is open to debate. What is now becoming clear however is that the UK solar sector will have everything in place come 2010 to help the sector become competitive with industries in Spain, Germany, China, California and a number of other places.

In order to make the UK competitive with other PV behemoths around the world, British Prime Minister Gordon Brown has made it clear that he wants to establish a ‘Green New Deal’ making reference to the economic plan introduced by F.D. Roosevelt during the Depression to revitalise the US economy. In a statement, Brown said that moving the UK from a carbon to a green economy would not only help meet climate change targets, but also provide jobs in new industries which would be starting up. In a report released by Brown in March 2009, the figures stated that moving to a green economy would create up to 400,000 new jobs in the next eight years with an estimated 1.3 million people being involved in the UK solar sector by 2017. Gordon Brown, on a visit to Washington to meet Barack Obama declared,

“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”.

With government backing, the UK is now in a strong position to build a solar sector which will be capable of emulating PV industries in Germany and Spain. In April 2010, the Clean Energy Cash Back (feed-in tariff system) will be introduced and the subsequent months will see a frenzy of activity both in the media and from investors as people attempt to join the industry in its infancy. 2010 will be a make or break year but it is now looking highly likely that as the economy goes out of recession and in to growth, the solar industry will reap the benefits of being both politically fashionable and financially attractive.

The announcement last week that the largest onshore wind farm in Europe is to be expanded is set to offer a massive boost to renewables in the UK. The announcement by the Scottish first minister Alex Salmond will see the construction of a further 36 wind turbines on the site. The permission to extend the East Renfrewshire site by the government will be seen as a step towards realizing some of the rhetoric spoken this week in regards to a ‘green new deal’ in Britain.

Gordon Brown’s announcement at the beginning of this year about the introduction of a green new deal, was a reference to the reforms made by the Roosevelt administration in the face of the 1930s depression which gripped the world. Many were encouraged by the language of the announcement, believing it to be a real indication of a move towards a green economy. Certainly, the extension of the Eaglesham Moor wind farm site will go some way to contributing to the low-carbon economy espoused by politicians in recent months.

In real terms, it is likely that the wind farm expansion will lead to the creation of around 300 jobs and will make the site the first over 300MW in Europe with a total capacity of 462MW, enough to power up to 250,000 homes. As the UK government seeks to meet its climate change targets of cutting carbon emissions 80% by 2050, the Whitelee wind farm will provide evidence that there is at least some tangible work being done to both establish a green economy and meet its targets.

Speaking about the expansion of the wind farm expansion, Alex Salmon commented,

“Whitelee in its current form is already flying the flag for onshore wind power in Europe. The planned extension, which I am delighted to announce today, will enable the wind farm to harness its comparative and competitive advantage in wind generated energy within Europe.

He went on to add, “It has the infrastructure, the expertise and the capacity to continue to develop in the future.”