Innovative opportunities in a green world

by Malcolm Wickes MP, Minister of State for Energy

Internet entrepreneurs are making the waves in today's commercial world but I expect that tomorrow's generation of innovative business men and women will take advantage of the huge opportunities created by our move towards a low carbon economy by coming up with green solutions.

The Government's ambition is to make the UK the best place in the world for investment in renewable technology. Over the next 20 years, as the world moves towards a low-carbon economy, significant new markets will be created for business.

The path to how this could be achieved has been set out comprehensively by November’s report from the Commission for Environmental Markets and Economic Performance (CEMEP).

We know that business wants to play its part in ensuring we generate our energy from greener sources. This is why we are hosting a Green Business Summit early in the New Year to provide an opportunity for a wider audience to debate the CEMEP report’s recommendations and how best to implement them.

The Government is very clear that we want the UK to take the lead in investing in low carbon technology and energy-efficient products and services. And our support for carbon capture and storage technology has potential for long-term applications throughout the world, particularly in China and India.

The good news is that we are already heading in the right direction. The UK has an increasingly thriving environmental market with a turnover in 2004 of £25 billion.

We are delivering on our promises to get offshore wind farm projects through the planning system, such as London Array, which will be the biggest in the world when completed. As the Secretary of State John Hutton has set out, we plan to open up our seas to up to 33 GW of offshore wind energy – enough to power all UK homes by 2020.

The forthcoming Energy Bill will create the right legislative framework to support investment in precisely such low-carbon energy sources. This is vital if we are to achieve the emissions reduction targets we are setting ourselves.

But we know that we need to go further in the future. In the UK thousands of new green collar jobs could be created by the potential of wind power alone – from around 8,000 now to more than 27,000 in 2020.

Global demand for wind energy generation is growing by 20% each year and we want to ensure that UK manufacturers seize this opportunity and exploit the wealth of expertise already at their disposal.

Such opportunities exist right across the green sector. Innovative projects like the new wave and tidal facility off the Orkney Islands, the recently consented Wave Hub in Cornwall and a Severn Barrage, if developed, will all ensure the UK remains a centre of renewable excellence.

We are determined to support tomorrow’s green entrepreneurs through our renewed Manufacturing Strategy which will examine whether there is more Government can do to encourage manufacturers to expand into renewables and other emerging markets - for instance by encouraging energy innovation through research and development programmes.

This drive is supported by the Research Councils and the Technology Strategy Board and the new Energy Technologies Institute. It will be investing at least £600 million over the next decade in R&D into low-carbon energy technologies, drawing on private as well as public funding.

But investment also needs to address the demonstration and deployment stages of the innovation process. This is why we established the Environmental Transformation Fund, a £1.2 billion fund for the three years of the comprehensive review period from April 2008 to March 2011.

DEFRA and BERR are jointly responsible for the domestic element of the ETF, which has a budget of approximately £370 million to be spent on the demonstration and deployment of low carbon, energy efficient technologies.

Business has an important role to play in ensuring we reduce our demand for energy.

In fact we are in the process of launching the first in a series of papers outlining our aspirations for demanding new targets for the energy efficiency standards and performance of new products. We want to help businesses become more energy efficient and cut energy use, for instance through the use of smart meters.

Smart meters in every business will play a crucial role in reducing the UK’s carbon footprint and energy bills. They provide the chance for each of us to provide better information and more accurate billing.

Developments such as the Carbon Trust’s online carbon calculator for businesses will allow companies to quickly work out their main carbon impacts and how they can reduce emissions.

We also want to encourage more local microgeneration. Together with Ofgem we are examining the incentives and barriers that impact on community based ‘locally grown’ energy production. We have also made £86 million available under the Low Carbon Building Programme to encourage take up of microgeneration technologies.

For businesses we are working in partnership with the Carbon Trust to help demonstrate low carbon designs, integrating energy efficiency and microgeneration technologies in more standard buildings.

Businesses are already playing their part in our transition to a low carbon economy and are becoming acutely aware of the fact that failure to take action to reduce emissions is going to cost them not only money but customers. Increasingly the green credentials of a company are as much a selling point as competitive prices.

These are challenging times to be in business but potentially also times of great opportunity. Globalisation, technological change, climate change and other forces are creating new competition but also significant new markets.

The truth is that we need to accelerate the UK’s transition to a low-carbon economy, and business has an important role to play because there are opportunities there for the taking from a green industrial revolution.

Malcolm Wicks was appointed Minister of State for Energy on 29 June 2007 as part of BERR (the Department for Business, Enterprise and Regulatory Reform, formerly the DTI). Further information can be found at: www.berr.gov.uk.

Mr Wicks was previously Minister of State for Science and Innovation (November 2006 to June 2007) and, before that, Minister of State for Energy (May 2005 to November 2006) at the Department of Trade and Industry.

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