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British Bankers Worry Cuts Will Burst Green Bubble

Ministers are being urged to give guarantees that tax breaks and subsidies for new renewable power projects will remain in place for the long-term by senior figures in the business world.

Leading figures in the City also warn that the UK still lacks the port facilities, fabrication yards and grid connections that are essential if the country is to build the vast offshore windfarms needed to meet ambitious climate change targets.

Susan Rice, managing director of the Lloyds banking group in Scotland – one of the largest City investors in renewables – said companies were still wary about the risks and upfront costs of building multi-billion pound offshore windfarms.

“Some creative thinking from government would help us a great deal,” she said. “For the projects which began last week we would like to have some assurance with finance. The government has the chance to be really helpful.”

Rice is one of the main speakers at a renewables financing conference in Edinburgh tomorrow. Hosted by the first minister of Scotland, Alex Salmond, the conference will be attended by UK and Scottish energy ministers, the European Investment Bank, the European commission, energy companies and major European banks and investment funds.

Salmond said up to £200bn would be needed in the next 10 years across the UK and that he supported Rice’s concerns.

He said the conference was designed to repeat the success of an investment conference held in 1972 in Aberdeen to plot the exploitation of North Sea oil and gas reserves. Estimates suggest that marine energy projects, including wind, wave and tidal power, could generate up to 68GW of electricity within Scottish waters by 2050 – 10 times Scotland’s current electricity usage.

“I’m hoping this event will be a catalyst and that people will walk away from this conference thinking, ‘Wow’,” Salmond said. Last week, he raised the Scottish government’s target for green electricity generation from 50% to 80% by 2020.

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