The Green Investment Bank - Environmental Audit Committee Contents


Written evidence submitted by Stockton-on-Tees Borough Council

1.0  EXECUTIVE SUMMARY

1.1  Stockton-on-Tees Borough Council supports the principle of the Green Investment Bank to enable the adoption of sustainable energy measures. The comments in response to the Environmental Audit Committee request cover the first three areas of interest raised by the Committee.

1.2  Regarding barriers the recently released Ofgem data on the uptake of Feed in Tariffs has shown the North East region including the Borough of Stockton-on-Tees significantly trailing the rest of the UK, both in terms of number of installations and installed capacity. This repeats the experience under Low Carbon Buildings Programme and Clear Skies. Financial support in an area of below average household income may therefore go some way to increasing the uptake. In addition the many solid wall and other hard to treat properties requiring much more costly external or internal cladding to improve thermal efficiency may be dealt with under GIB finance.

1.3  It is important that the Green Investment Bank is established without undue delay and with clear operating rules to overcome the current hiatus and uncertainty regarding funded support in this area.

1.4  The objectives of the Green Investment Bank should be to:

Enable reduction in energy demand by providing finance to energy efficiency measures that cannot be financed from any other source.

Enable the development of a low carbon economy by providing finance for the capital cost of sustainable energy installations.

1.5  This should apply to all sectors of the economy other than well resourced, large scale multi-national companies. Lending decisions may need to be supported by securing the loan by a charge on the property concerned. Investment by the GIB should be into the green business sector with investment priorities directed at the UK market.

2.0  INTRODUCTION

2.1  Stockton-on-Tees Borough Council is a unitary local authority in the North East of England. The Council is operating a Carbon Management programme with the objective of reducing carbon emissions from Council activities by 25% by 2013, a five year programme currently just meeting this target. Stockton-on-Tees Borough Council is also a signatory to the EU Covenant of Mayors, one of the twelve local authorities in the North East of England Region who have all signed into the commitment to reduce borough wide carbon savings in excess of 20% over the ten year period to 2020.

2.2  The Borough includes a number of large process industries with associated high levels of carbon emissions and the Council plays a lead role in seeking ways of reducing these. In 2009 the Council adopted a Renewable Energy Strategy and is now identifying routes to achieving a major shift away from grid electricity and natural gas as the only means of meeting Government targets for 2020 and 2050. Local businesses and industry are not ignored in this with the Council's active participation in the Tees Valley Climate Change Partnership providing links with other sectors.

2.3  The financing of the move to low carbon energy supply and increased energy efficiency is of concern, for the households within the Borough, the Council itself and the broader private sector. A varied armoury of support is therefore essential and the Green Investment Bank will have a clear role to play in this. Stockton-on-Tees Borough Council therefore needs to see this welcome initiative operating effectively and quickly, particularly given the low uptake of the Feed in Tariff opportunity in the region.

2.4  It is in this context and from experience in carbon management and effective carbon reduction that Stockton-on-Tees Borough Council makes this submission to the Environmental Audit Committee.

3.0  FACTUAL SUBMISSION

3.1  Ofgem data on regional installations of Feed in Tariff registered renewable energy installations:
RegionInstallations Installed MWHydro Micro CHPPV WindPopulation (2001) millions Installations per capitaMW/millions Capita
South West2,3196.583 252,195 994.9473.27 1.34
South East2,6155.955 322,587 238.0326.88 0.74
Yorkshire and Humberside1,361 4.5995 1,2541024.9 277.760.94
East of England1,418 4.07541,363 515.4262.59 0.75
East Midlands1,0103.067 21962 454.2240.48 0.73
West Midlands6722.069 21644 255.3126.79 0.39
North West5511.657 71489 546.782.24 0.25
London5621.245 561 17.278.06 0.17
North East2180.635 3194 212.587.20 0.25
Total10,72629.885 51510,249 42149.1

3.2  The above data has been taken from the Ofgem supplied data, and confirms a very low uptake of the Feed in Tariff opportunity in the North East region which includes Stockton-on-Tees and mirrors similar statistics from earlier programmes such as Low Carbon Buildings Programme and Clear Skies.

4.0  COUNCIL RESPONSE

4.1  Stockton-on-Tees Borough Council makes the following response to the Environmental Audit Committee from the perspective of actively pursuing the reduction in carbon emissions from Council activities and across the Borough, the latter to meet both government targets and the Covenant of Mayors requirement for a 20% reduction in CO2 emissions between 2010 and 2020.

4.2  Regarding the significance of any barriers or "market failures" requiring the establishment of a Green Investment Bank, and any risks of not getting this done quickly, recent data issued by Ofgem on the impact of the Feed in Tariff scheme on installed capacity of renewable energy technologies, summarised above in section 3.0, has shown the North East of England to have achieved the lowest number of installations and of installed capacity.

4.3  Similar poor performance was evident under the Low Carbon Buildings Programme, Clear Skies and PV programmes.

4.4  It is possible that the lower income levels in the region are a factor and therefore availability of loans under appropriate terms are likely to increase the uptake of renewable energy technologies thus addressing this regional market failure.

4.5  The risk of not establishing the Green Investment Bank quickly is that the low uptake in the region continues thus slowing progress towards the carbon emissions reductions required.

4.6  The objectives and roles the Green Investment Bank should assume, the areas it should operate (and not operate) in, and how its lending and investment decisions should balance green benefits against financial risks are discussed below:

4.7  The objectives should be to:

Enable reduction in energy demand by providing finance to energy efficiency measures that cannot be financed from any other source.

Enable the development of a low carbon economy by providing finance for the capital cost of sustainable energy installations.

4.9  The Green Investment Bank should operate in the household, small business and public sectors including RSLs.

4.10  The Green Investment Bank should not provide support to large, multi-national organisations.

4.11  Lending decisions should include security of loan by a charge on the property concerned.

4.12  Investment decisions should support green businesses and provide a positive return.

4.13  The Green Investment Bank's investment priorities, and whether and how the bank should support and foster areas where the UK has emerging green technology strengths;

4.14  Investment priorities should be towards UK green technology developments with an emphasis on local supply where practicable to minimise carbon emissions associated with supply and installation.

5.0  SUBMISSION CONTACT DETAILS

5.1  This submission has been made on behalf of Stockton-on-Tees Borough Council, Municipal Buildings, Church Road, Stockton-on Tees, TS18 1LD in consultation with relevant Heads of Service.

11 October 2010



 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 11 March 2011