‘Green’ energy market to grow to £50bn

A market worth more than £50bn will be created for new wind, wave and tidal power equipment in British waters by 2020, the head of the new government-backed energy research and development group has said.

David Clarke, chief executive of the Energy Technologies Institute, will on Tuesday launch the first four projects backed by the group, which aims to encourage the commercial development of low-carbon energy sources including renewables, electric vehicles and power stations that capture and store carbon dioxide emissions.

The ETI, based at Loughborough University, is still backed by just six companies instead of the 11 that the government hoped for. Each company has promised to contribute £50m over 10 years.

Mr Clarke told the Financial Times it was “clearly challenging to find new partners in the present climate”.

However, he added that the ETI was “in discussion with a number of groups” and it would be easier to persuade them to sign up now that there was so much emphasis on low-carbon industries as a source of future jobs and economic growth.

Creating jobs and developing a UK manufacturing base in energy industries is not the principal objective of the ETI, which has been set up to develop new sources of energy supply for consumers.

Four of its six members have foreign parents – Royal Dutch Shell, Eon of Germany, EDF of France and Caterpillar of the US – and the other two, BP and Rolls-Royce, are UK-based multinationals. Moreover, the companies that receive grants from the institute need not be British.

However, Mr Clarke, who attended Gordon Brown’s jobs summit on Monday morning, said it would be “a great bonus” if the ETI could help create a thriving UK industry in both manufacturing and servicing products such as wind turbines.

He estimated that to meet government targets, about 4,000 offshore wind turbines and 2,000 wave or tidal power devices would have to be installed by 2020, at a cost of £50bn or more.

He added: “The sheer volume of the change that we are talking about in the UK energy system is so great that the number of jobs involved is bound to be very significant.”

The first four projects to be unveiled today, three in offshore wind and one in wave or tidal power, will receive a total of £60m in funding from the ETI.

Its target is to find ways to cut the cost of these relatively expensive sources of electricity so that they can better compete with coal and gas-fired power stations.

EDITOR’S CHOICE

Philip Stephens: Global warming: the way not to mobilise the masses – Dec-11

Copyright The Financial Times Limited 2009

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