David Lee: We must find cash to exploit our goldmine of renewable energy

IF ALEX Salmond had a pound for every time a minister has described the waters off northern Scotland as "the Saudi Arabia of renewables" or mentioned creating 70,000 jobs in the sector, he'd be able to pay for his green revolution.

Unfortunately, he doesn't – and the time to find out how to pay is running out fast.

The Fossil Fuel Levy should deliver 182 million for renewable energy projects. However, ministers know this is a drop in the turbine-turning ocean compared to the sums needed to deliver its low-carbon promises.

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The Scotsman Conferences last month asked "Can The Green Economy Deliver for Scotland?". The conclusion was that it could, but only with substantially more cash – and quickly.

Jim Mather, the energy minister, spoke for 20 minutes without mentioning finance once. When pressed, he said it was "fanciful" to think that cash for renewables would start pouring like a 1970s gush of oil.

At the same event, Susan Rice of Lloyds Banking Group estimated 20 billion was needed to fund investment in major offshore wind farms, marine renewable technology and more – far higher than the 2 billion mentioned for a new Green Investment Bank.

"We know what needs to be done," she said. "The big question is, how do we fund it?"

John Swinney, the finance minister, doesn't seem too sure. At a Sustainable Scotland summit this month, he said the Fossil Fuel Levy kickback could lever out far more private and public sector cash. "With a leap of faith," he said, this could see "somewhere approaching 1 billion by the end of the year to spend on renewables."

If anyone else thinks 182m can lever out another 800m by the year's end, please raise your hand now.

The scale of ambition is laudable but there must be realism. We are at a terrible point in the economic cycle and money is going to be exceptionally hard to come by in the near future.

Scotland is in a renewable energy vice. It has enormous potential to become a world leader in offshore wind and wave power by developing the network that grew up around oil and gas a generation ago. Yet huge investment is needed to do this. It is also needed for R&D, new skills, grid problems and much more. But where does the money come from?

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Susan Rice talked about "a packaged approach, mixing public and private finance, equity loans and incentives and finding the means to access capital markets in a meaningful way". She and others are grappling with these problems through the government's 2020 Climate Delivery Group, but can they find answers quickly enough? With banks ultra-cautious in their lending, do we need government pressure to offer loans at preferential rates to companies who can make a real difference?

Alex Salmond is pinning his hopes on the Scottish Low Carbon Investment Project (Slip) conference in September. He wants the expert gathering to find "innovative answers" to fund the green economy – and it might do so.

Yet in a Scotsman article last month, Adrian Gillespie, Scottish Enterprise director of energy and low-carbon technologies, said Slip was "an important first step in finding new sources of finance for low-carbon projects".

It is hugely worrying that we are still at the stage of asking questions and looking for answers – and that the autumn conference is seen as a "first step". It is time to move up a gear and start making things happen.

• David Lee is a member of the Scottish Government's 2020 Climate Group