Green Investment Bank 'must be able to borrow'

The government’s advisors on climate change have called for it to allow the Green Investment Bank to borrow money immediately, along with a possible scaling back of ambitions to build off-shore wind farms.

The report also suggests that nuclear power should make up around 40% of the electricity generation in the UK by 2030, a figure likely to require which may require more nuclear power stations to be built than currently envisaged.

The committee, set up under the 2008 Climate Change Act to independently advise government, and headed by Lord Adair Turner, made the recommendations in its annual renewable energy review, published today.

It found nuclear power was the most cost-effective low carbon power source for the next decade, justifying “significant investment if safety concerns can be addressed.” It called for 185 Tera-Watt hours (TWh) of generation per year from nuclear. The current programme to build eight new stations would generate capacity of 175 TWh.

Meanwhile plans for off-shore wind generation should be “moderated” in the targets for 2020 because of the likely cost. The report says: “If renewable energy targets for 2020 can be met in other ways, a moderation of offshore wind ambition for 2020 could reduce the costs of decarbonisation.”

“Offshore wind is in the early stages of deployment and is currently significantly more expensive than either onshore wind or nuclear. Ambition for offshore wind to 2020 should not be increased unless there is clear evidence of cost reduction.”

The committee’s report envisages the almost total decarbonisation of the power generation sector by 2030.

On the Green Investment Bank, it calls for the government to look at allowing it to borrow money to investment in early stage technologies from as soon as it is formed in September next year. At the budget in March the chancellor announced the GIB will not be able to borrow money to finance projects until 2015/6 at the earliest.

The report says: “Unless it can be demonstrated that risks of a shortage of finance to 2015/16 can be mitigated, allowing the GIB to borrow money from its inception should be seriously considered.”