Written evidence submitted by Stockton-on-Tees
Borough Council |
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
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.
2.1 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
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
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
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
3.0 FACTUAL SUBMISSION
3.1 Ofgem data on regional installations of Feed
in Tariff registered renewable energy installations:
||Wind||Population (2001) millions
||Installations per capita||MW/millions Capita
|Yorkshire and Humberside||1,361
|East of England||1,418
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
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