Green Bank 'to focus on energy saving'

THE proposed £3 billion Green Investment Bank is expected to switch its focus from supporting the growth of the renewables industry in favour of domestic energy efficiency schemes.

Industry lobbyists are worried that plans to use core government funding to leverage 15bn in investment in major infrastructure projects will now be set aside in favour of funding schemes to encourage saving on energy bills.

The switch has unsettled campaigners for the bank, particularly in Scotland which sees it as a key part of plans to build a new industrial sector around offshore wind, wave and tidal power.

The shift in focus would be a blow for Scotland as projects struggle to attract private investment despite the Scottish Government's ambitious targets for green energy production by 2020.

But the 3bn being invested by government is set to be used to finance the Department of Energy and Climate Change's (DECC's) "green deal" programme. The scheme, announced at the end of 2010 as part of the coalition government's Energy Bill, will allow homeowners and small businesses to go ahead with energy efficiency improvements funded up front from the expected cost savings on heating bills.

The shape of the new bank is being hotly debated by various government offices including DECC, the Department for Business, Innovation and Skills (BIS) and the Treasury. There is also a tussle between Edinburgh and London over the location of the eventual headquarters of the bank.

Nathan Goode, head of energy and sustainability at accountancy firm Grant Thornton, has warned that the new direction of the bank was a major shift in focus but that campaigners were renewing efforts to see it located in Edinburgh.

"That is a long way away from some of the stuff they were talking about with offshore wind and industrial waste projects. The new criteria muddies the waters because it moves us away from the concept of what the GIB was meant to do."

Goode, along with members of the Scottish Chambers of Commerce, is preparing to make further proposals to BIS which address the new criteria and which will be presented in September.

Niall Stuart, the chief executive of the Scottish Renewables Forum, said: "The Green Investment Bank should focus on the two biggest opportunities for our renewables industry which are in offshore wind technology development and in taking the marine energy industry forward to commercial deployment."