£1 billion to launch green investment bank

The Government will provide £1 billion in funding for a green investment bank, as part of efforts to make the UK a leader in the low-carbon economy, the Chancellor George Osborne said today.

He also said up to £1 billion funding would go towards building one of the first power stations in the world with technology to capture and permanently store carbon emissions, to help cut greenhouse gases from electricity generation.



The announcement of the cash for carbon capture and storage (CCS) technology came just hours after energy giant E.ON announced it was pulling out of the competition for the funding - leaving just one shortlisted candidate, ScottishPower.



The Department of Energy and Climate Change confirmed there would be a second round of CCS projects, with up to four more schemes given the go-ahead, although funding mechanisms had yet to be decided.



And £200 million would go to developing offshore wind technology and manufacturing, and support the upgrade of ports to support the industry.



Setting out green measures in the comprehensive spending review, Mr Osborne said it was necessary when money was tight to "ruthlessly prioritise" areas of the economy which would support economic growth, including low-carbon infrastructure.



He joked that yesterday protesters had scaled the Treasury urging ministers to go ahead with the Green Investment Bank - the first time anyone had protested in favour of a bank.



He confirmed the new bank would would go ahead, with £1 billion funding in the spending review - but he hoped much more would be raised by private sector investment and the future sale of government assets.



It is hoped the bank will fund clean energy and low carbon projects, leveraging billions of pounds in private finance.



Businesses and green groups have warned that some £4 billion to £6 billion is needed over the first four years of the green investment bank, from a combination of public and private sources, to ensure it has enough capital to do its job.



John Sauven, chief executive of Greenpeace, whose protesters climbed up the Treasury yesterday to protest over the bank, said: "Billions of pounds for such a bank could provide thousands of new jobs and make Britain a world leader in cutting-edge low-carbon technologies.



"But the green bank has to be a bank. A poorly financed fund is not a green bank. It doesn't have the financial clout, or the independence to do the job, and will end up as nothing more than an ill-equipped quango.



"So if this government wants to live up to its own billing as the greenest ever, this bank must be independent and properly financed.



"Anything less will dash hopes of a new green economy for Britain, and our chances of tackling climate change and energy security."



Despite fears over the future of green subsidy schemes in the spending review, the feed-in tariff which pays people for small scale green electricity generation is set to remain as it is until an already planned review in two years' time.



The proposed renewable heat incentive will also go ahead, although plans to pay for the scheme, which aims to boost green heating technology, through a levy on bills have been ditched as being "overly complex".



Instead some £860 million of funding aims to drive a ten-fold increase in renewable heat over the next decade.













Energy Secretary Chris Huhne said: "Like the rest of the public sector we have taken some tough decisions but we remain on course to deliver on our promise to be the greenest government ever.

"We will help create green jobs and green growth - and secure the low carbon investment we need to keep the lights on."



The Renewable Energy Association's chief executive Gaynor Hartnell said the announcement on renewable heat was a "big breakthrough" that would put green technologies at the heart of UK energy policy.



"Companies throughout the UK are poised to deliver on renewable heat, creating tens of thousands of green jobs over the coming decade.



"While the announcements today are tough in many areas, there is a good news story here to celebrate - the coalition Government is putting its money where its mouth is.



"We need to see the details but it looks like they're serious about supporting massive growth and employment in the UK's renewable energy sector.



"Once in place, the RHI will enable individuals, businesses and communities to choose renewable heat and take direct control of both their carbon footprint and their energy bills."



Country Land and Business Association (CLA) president William Worsley said: "The proposals for a renewable heat incentive (RCI) as set out in the Comprehensive Spending Review are really good news for commercial and domestic producers and consumers.



"Heat accounts for half of UK carbon emissions, and saving carbon through renewable heat is far cheaper than through the generation of renewable electricity.



"The RHI will transform the wood fuel market, resulting in better management for Britain's woodlands and helping to create and manage wildlife effectively," he added.



On the confirmation that the Government would provide up to £1 billion funding for the first carbon capture and storage (CCS) plant, ScottishPower - the only company left in the running for the cash - said it would help the UK to make the most of its leadership position in developing a crucial low-carbon technology.



A spokesman said: "The ScottishPower consortium remains committed to the carbon capture and storage project at Longannet, and we are on schedule with our front-end engineering and design work."



Also in today's announcement were promises to help tackle fuel poverty.



Winter fuel payments for pensioners would remain exactly as they were, and the temporary increase in cold weather payments made last year would be made permanent, Mr Osborne said, adding: "Higher cold weather payments should be for life, not just for general elections."



The Warm Front programme, which provides insulation and energy efficiency, will be scaled back and the new "green deal" will target the most vulnerable to tackle fuel poverty.











Friends of the Earth executive director Andy Atkins said: "The Chancellor's pledge for £200 million to support low-carbon technologies and a new bank to help green industries get off the ground is good news - as is his clear commitment that it will be a bank not a mere fund - but it will need significantly more than the £1 billion allocated to be effective."

And he warned: "Slashing energy efficiency grants to some of the UK's most vulnerable people will send a chill into many homes, while cutting £300 million on buses will have a devastating impact on services that the poorest people rely on most."

Start your day with The Independent, sign up for daily news emails
News
news
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
Arts and Entertainment
tvChristmas special reviewed
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
Life and Style
fashion
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
tv
News
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Sport
sport
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Ashdown Group: Marketing Manager/Marketing Controller (Financial Services)

£70000 - £75000 per annum + benefits: Ashdown Group: Marketing Manager/Marketi...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all