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Sustainable energy news

Emma Duncan, deputy editor of The Economist, lamented this week in The Times that the supposed economic growth the UK is currently experiencing is baseless: "based on the same froth as before the crisis - consumer credit and a housing boom".

She makes the point that part of this country's inability to rebuild meaningful, dependable growth is that "the kind of changes we are seeing now are less fundamental, and less productive, than they have been in the past", citing the greatest technological advances of the 21^st century as facebook and twitter, compared to things like, electricity, the car and modern medicine in previous generations.

It reminded me of another statistic I had heard last week from John Kay, the economist, who, speaking for a film on "transforming finance", noted that only 3 per cent of investment goes to real businesses - the rest is recycled around the City.

The Chancellor does recognise this loss of investment in tangible production, but instead of looking forwards to new, 21^st century ways of generating real growth, he is looking back: by relaxing rules on coal production for energy and scrapping restrictions on CO2 emissions so that more new roads can be built. These options are attractive to the Chancellor because they are the quickest and most cost-effective way to get things done and meet his productivity objectives. But they are regressive. Listening to the Autumn Statement last week, I wondered if George Osborne had been watching too much Mary Poppins. His image of our industrial past seems more Dick van Dyke than dark satanic mills.

Danny Boyle glamorised the birth of British industry in the Olympic opening ceremony. But his, and the Chancellor's, economic nostalgia seems rather misplaced. When Britain was at its most economically productive, people died in factories every week. The infrastructure that once made Britain great would not do so again. And if you want to see the by-product of modern day over-industrialisation, look to China then look to its skies: you can't see them.

The Chancellor's Proustian mission might bring jobs, but with them: smog.  Industry doesn't have to chug, grind and pollute. Industrialisation 2.0 is clean technology. By investing in renewable infrastructure, state of the art insulation, solar panels, Archimedean screws, local biomass plants and electric cars, we get measurable output and jobs, but without the smog.  They might also be genuinely more appealing to a long term investor than their fossil fuel-dependent alternatives. Returns might not hit double digits for an income-generating solar farm. But no one is warning about a solar bubble. Hydro power operators don't need to embark on costly explorations that take years before finally striking water.

If you want to invest in something real, but also 21^st century, then the clean industries are it. Warren Buffett knows it (check out MidAmerican Energy Holdings' renewable energy exposure), UK plc knows it (check out John Lewis et al in their 100 per cent renewables quest) and the more than £1 billion's worth of IPOs in renewables stocks this year - a record for the sector, together with the £30 million of retail bonds, £3 million of crowdfunds and £9 million approx. of co-operative raises, suggest that more and more small investors know it too.

The rationale for investing in renewable energy is easy to understand.  Were it not for some fears over the current Government's commitment to their subsidies and planning support, as well as the odd aesthetic concern, they would be a very easy sell.

We will always need energy. Wind and solar technology is underpinned by 20-year warranties. That's a pretty big vote of confidence from underwriters that they are still going to be doing their job way into the future. 

But our economy is heavily reliant on the services sector. Anything we can do to swing this balance towards infrastructure like clean tech, with its predictable output, would boost the sustainability of the UK as well as investor returns.

Article submitted by Rebecca O'Connor from the Trillion Fund