 |
|
Article Three
UK leads Europe in race for Green Energy Investment
The UK is the European hotbed of investment and innovation in low carbon technologies, attracting 41% of the total venture capital and private equity investment in low-carbon SMEs in the EU, according to a report released earlier this month. The new research also reveals that the global sustainable energy market opportunity could reach £2,000 billion per annum by 2030.
The study, conducted by independent consultancy Vivid Economics, investigates the role small and medium enterprises (SMEs) play in tackling climate change and the extent to which the UK is harnessing this global opportunity. The key findings of 'The Race to Capture the Carbon Pound: The UK’s place in the global market for low carbon innovation' include:
- Britain’s low carbon technology market could, on the basis of current carbon reduction targets, grow by 30% year-on-year up to 2020, putting it on course to be as important an asset to the UK economy by 2030 as commodities like steel or wheat are today. The market opportunity could reach £2,000 billion per annum globally if the world acts to stem climate change. By comparison, steel sales are currently worth £1,200 billion per annum and wheat sales today are £520 billion.
- 2007 was a record year for investment in sustainable energy with total global investment growing from £50 billion in 2006 to £74 billion in 2007
- UK companies attracted over £1 billion of venture capital and private equity finance into renewable energy and energy efficiency technologies in 2007. This is more than twice that of any other European country and 41% of the EU total
- Climate change entrepreneurship could be a bigger, more sustainable opportunity than the dot.com boom of the late nineties when global sales of personal computers were growing at 15-20% (as compared to the 30% potential annual growth in low carbon technologies in the UK between now and 2020)
The research shows UK SMEs as true innovators who are leading the way in the development of cutting edge technology and reveals the top ten low carbon sectors attracting the most private equity investment into SMEs in the UK, as compared with the rest of Europe. Investment is dominated by renewable energy, in particular marine, with solar power, controls/sensors and biomass also seeing significant investment.
The report, which shows that the UK is now second only to the US for investment in low carbon SMEs, offers advice to UK companies seeking investment including a guide to finding the right investor and the criteria for successful collaboration.
Robin Smale, Director of Vivid Economics, said: “We are now at a crucial stage of realising what the magnitude of the energy challenge is and just how much work needs to be done to bring down the cost of reducing emissions. UK SMEs are ideally placed to take on this challenge and it is extremely encouraging to see the extent of the contribution they are already making in the UK.”
The study will be discussed in depth at a roundtable chaired by Lord Oxburgh, the former chairman of the House of Lords Committee on Science and Technology, later this month.
Download the full report.