Confidence in UK cleantech sector falters ‘Wake-up call to government’ as fears grow over investment levels
London 21 January 2011: Confidence that Coalition Government will enable the growth of the UK’s cleantech sector over the next 12 months has fallen sharply since the Comprehensive Spending Review and electricity market reform announcement last month, according to new research from Ernst & Young, released today.
The study – which surveyed 529 UK-based corporates, financiers and cleantech companies over the past three weeks – found that just 13% of respondents believe the Coalition will establish the conditions for success in the cleantech sector in 2011. This compares to a figure of 38% from a similar survey undertaken between August and October last year.
Doubts over whether effective financing frameworks will be in place in 2011 to support growth in the cleantech sector have also markedly increased. The survey found that only 12% believe the right frameworks will be in place, compared to 36% originally.
Furthermore, the survey also found that fewer people (51%) now believe that UK investment in clean energy and clean technology will increase in 2011 compared to 2010, a fall of 10% from the original survey. And just 7% expect there to be sufficient investment in 2011 to give the UK competitive advantage, compared to 17% in the earlier research.
Steve Lang, Ernst & Young’s UK Cleantech Leader, comments: “These results are a wake-up call to a government that had set out to be ‘the greenest ever’. Although the Comprehensive Spending Review left the clean technology sector relatively unscathed, the market is now less confident that it will deliver the economic growth and jobs that Britain so urgently requires. This is because the government has not yet established a clear and long-term policy framework for cleantech that will unlock the investment needed to establish infrastructure and create jobs in such an internationally competitive sector.”
This research supplements a recent report from Ernst & Young, Cleantech and the UK growth opportunity – time to deliver. This report, released last month, found that major obstacles stand in the way of growth in the UK’s clean energy and technology sector and time is running short to remove them.
The study – which canvassed the views of over 300 leaders from stakeholder groups including government, corporates and investors between August and October 2010 – found that 76% believe that urgent and decisive action is needed or the UK will fall behind other countries that are prioritising cleantech as a sector of national strategic importance.
Lang concludes: “The global cleantech market is at a tipping point. With money drastically limited, and as public sector job losses begin to bite, cleantech has unique potential to deliver long-term economic growth, create jobs, energy security and cutting edge competitiveness to the UK economy as we transition to a low carbon more resource efficient world.
“We need decisive action now or investors will deploy capital into more dynamic cleantech markets where they are sure the sector is going to be supported over the long term. It’s time to deliver.”