Tag Archives: press-releases
Ways Of Gaining Exposure To Renewable Energy
Biofuel projects are currently in a very strong position. By Jonathan Turney | Published May 13, 2013 The rapidly developing biofuels industry has helped to put renewable energy on the map, with mandated blending targets indicating that the sector is ripe for further growth. Currently, just 6bn litres (or 4.75 per cent) of European transport fuel comes from renewable sources but as this figure needs to rise to 18.5bn litres by 2020, the renewable transport fuel market is set to triple in just seven years. Sustainable biofuel projects are currently in a very strong position. These schemes use technology with known commercial results and operate within a supportive regulatory environment – as demonstrated by the now binding UK Renewable Transport Fuel Obligation. Furthermore the UK is ideally suited to domestic biofuel production, with a large transport fleet, a surplus of low-grade feedstock and an existing petrochemical infrastructure. The renewable energy sector has undergone huge leaps in technology and development in the past few years and there are a range of projects offering attractive investment propositions with market-wide appeal. Many opportunities in the renewable energy sector are supported by government incentives to encourage investment. As a result, these tax efficiencies can be used to enhance returns or offer downside risk protection. Biofuel projects are particularly attractive as they usually have large capital expenditure requirements that generate in-year capital allowance relief that can be used in mitigating tax liabilities. These schemes may also contain expenditure on energy-saving plant and machinery, attracting enhanced capital allowances that generate 100 per cent first-year allowances. Such projects tend to be sited in regeneration areas or ‘enterprise zones’, which may also attract Business Premises Renovation Allowance relief on renovation costs. But project finance can be difficult to secure in the current climate. An alternative source of finance, which is starting to attract interest in the renewable energy sector, is ‘retail debt’. Products often referred to as ‘mini-bonds’ with a fixed term and return have been borne out of a clear demand from retail investors. The best-known example is energy firm Ecotricity, which raised £20m in two tranches – offering a four-year term of 6-7 per cent interest with a minimum investment of £500,000. While other investments look towards peer-to-peer lending, doubts surround the regulation and default-rate risks associated with this type of finance. With retail debt – a proven source for raising project finance in the renewable sector – this type of investment can bypass many of the issues faced and secure the necessary funding. Jonathan Turney is an associate director at Future Capital Partners Continue reading
UK Lacks Proper Dialogue On Biomass Worth
10 May 2013 Energy consumers face rising bills and a fast-approaching shortfall in electricity generating capacity. They deserve honesty and clarity about their options. Few energy sources match solid biomass in offering baseload energy, security of supply, cost-effectiveness and ability to ramp up when we need it – before 2015. Far from being a “reckless” choice, as some activists claim, it can and is being done sustainably. It will also cost the UK £44bn more to decarbonise without it. It is misleading to imply that a thriving British biomass sector would depend solely on British wood, swallowing up domestic supplies so there is none left for any other use. In fact, most of the supply is expected to be imported from Canada and the US, where supplies are plentiful. Electricity fuel imports are not new; we ship in most of our coal and a significant amount of gas. What is different is the Government’s requirement that the biomass supply chain shows an independently verifiable minimum 60% reduction in greenhouse gas emissions compared with the EU fossil fuels grid average. This is only possible with sustainable sourcing and supply chains. Groups calling for a rejection of biomass rely on misused Government data and widely discredited pseudo-science divorced from the reality of the industry. It is time for a positive dialogue, rooted in evidence not emotion, so we can deliver a much-needed source of energy to the UK. Gaynor Hartnell, chief executive, Renewable Energy Association Continue reading
EU Carbon Price Crisis Spreads To Australia
Last updated on 10 May 2013, 7:33 am By John Parnell The crisis in the European carbon market has spilled over to Australia with the government forced to postpone a promised tax cut. Australia placed a charge of A$24 per tonne on the largest emitting industrial sectors with its powerful mining industry hit hard. A planned increase in the tax free income tax threshold that was linked to money raised by the carbon tax has now been postponed. “If the carbon price forecast is revised down, as it will be in the budget, then there’s no case for the additional measures that we had put in place,” Climate Change Minister Greg Combet confirmed on Wednesday. Opposition leader Tony Abbott, who has pledged to scrap the tax and the country’s climate commission should he win September’s election, said it was further evidence that Julia Gillard’s government could not be trusted. “This is a government that talks about living in the Asian century, yet they gave economic policy-making in Australia over to the Europeans,” said Abbott. The struggling EU Emissions Trading System (ETS) will be partially linked to the Australian market in 2015 and fully linked in 2018. A recent vote by the European Parliament against reforms of the struggling ETS raised fears that market faced a period of stagnation. Asked by RTCC if Australia was reviewing the plans for the link-up, a spokesperson for Minister Combet said: “Australia remains committed to the link with the European Union carbon market.” They added that carbon markets including the EU link-up were part of the process of building momentum for the UN’s 2015 global climate treaty, due to come into force in 2020. A combination of reduced economic output as a result of the recession and the absence of more ambitious EU climate targets mean the cap has been placed too high and the demand to trade emission permits is too low. In April the proposal to withhold 900m credits from the next phase of the system to this imbalance in supply and demand, was voted down 334-315. A second vote on a tweaked version of the reforms will take place in the first week of July. Continue reading
