Golden opportunity for the Green Investment Bank
10 Jun 11 - Martin McAdam, CEO
"Let me be first in line to fund your second project."
That is the common refrain heard by technology developers when
they first knock on the door of a bank. Traditional banks
are, by their nature, risk-averse, and will only lend money to
tried and tested technology projects. For onshore wind,
getting debt is not a problem. But for marine energy it is a
challenge!
We are looking to commence our first 10MW project in 2014. This
will cost more than £70 million - big money in anyone's book.
Even if we could get debt from a commercial bank then the rate of
interest would be prohibitive. Today we cannot
cost-effectively borrow the money we need to get our technology
deployed at array scale.
This is where the Green Investment Bank can help.
Golden opportunity
The Green Investment Bank has a golden opportunity in the
next two to three years to make a massive impact on the marine
energy sector. Relatively small amounts of guaranteed government
debt would, in my view, enable Aquamarine Power to unlock
considerable private investment.
The evidence backs this up. RenewableUK's 2011 State of the Industry report
outlined that, for every £1 of public support leading marine
technology developers received, they were able to attract a further
£5 in private investment.
To deliver the UK Government's aim of 1.3GW of marine energy in
the UK by 2020, the marine energy industry believes six to eight
10MW projects need to be in place by 2015 and that this would
require public investment in the region of £130 million.
A vital element of this could be provided by the Green
Investment Bank. Similar support would, by contrast, make a much
smaller overall impact on the massive offshore wind sector, which
is fast approaching commercialisation.
Game-changing impact
Marine energy offers the Green Investment Bank the
opportunity to try out new products, 'get its feet wet' and make a
game-changing impact on an innovative world-leading technology
sector.
That is why this week I have written to the UK Government urging
them to consider making marine energy 'first in line' for Green
Investment Bank support. Let's hope they will provide the
support we need.