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Monday, October 25, 2021

Firms struggling to access green finance as half think carbon targets will be missed

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Siemens Industry and the Energy Institute advise Government that much more needs to be done to instil confidence in the UK’s ability to meet its energy targets.

A recent survey suggests there is a significant lack of access to finance for companies wanting to invest in green technologies to reduce emissions and comply with EU and UK legislation.

In a joint poll of over 300 senior energy specialists across the UK, only a third (33%) thought it was possible for Britain to meet its 2050 energy targets to reduce emissions by 80%, whilst over half (55%) of respondents thought the target would not be met. The remaining 12% were undecided.

One of the most significant issues facing businesses has been accessing the required finance to invest in energy efficient technologies. When asked ‘what has been your experience of British banks supporting companies who want to invest in energy efficiency technologies to reduce their costs and save energy?’, the results demonstrated significant blockages to liquidity for companies wanting to become more energy efficient.

A substantial 88% of respondents said that banks and the financial sector were either not interested in supporting investment in energy efficient technologies or provided ‘little feedback’. Approximately one in ten respondents had ‘positive feedback’ but less than 1% or one respondent had actually received finance for this type of investment.

Stephen Barker, Head of Energy Efficiency at Siemens Industry commented: “The Government increased capital allowances in the last budget for firms wanting to invest in energy efficient technologies and has also created the positive, but still emerging, Green Investment Bank which is a good start. But the effectiveness of these measures is limited as there is currently a critical gap in the actual delivery of finance for investment in the wider end user community. This is partly why businesses think we will miss our 2050 targets.

“The root of the problem is that we are often too short term in our thinking. What businesses need is access to affordable credit to allow them to make these types of investment, which can be capital intensive in the short term – but in the long term there is a reward of much lower energy costs which can transform the profitability of the manufacturing sector. There is still an issue that end users need to engage more with the opportunities that energy efficiency offers.”

Louise Kingham OBE FEI, Chief Executive of the Energy Institute commented: “To reach our carbon targets we must invest in energy efficiency. This poll suggests businesses still face barriers to doing so. Financiers need better knowledge around technology risk and return in different applications; signposting and access to good information for business is a must; as are the skills to install, operate and maintain technology to deliver value from such investment. The EI can help on each issue but the scale of the task requires Government, institutions and businesses to work in concert.”

For further information from Siemens Industry please visit www.siemens.com/drives

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