Renewable energy projects in the public sector received a significant boost today with more than £100m of new funding from HSBC.
Hospitals, council buildings and universities are all expected to benefit after the banking company's environmental arm announced a funding deal with renewables company Partnership for Renewables (PfR).
PfR is a venture set up by the Carbon Trust in 2006, dedicated to installing renewable energy technology on public-sector land. HSBC's environmental infrastructure funding arm has committed up to £18m for a 49% share in PfR.
HSBC has also put up a £30m "revolving" pot of cash that will provide the construction capital to start projects up and then "recycle" the money as the projects come on stream, providing the firm with roughly £100m of equity.
The partnership aims to develop a portfolio of renewable projects on public-sector land across the UK during the next five years that would generate 500 megawatts – enough to power 230,000 homes.
A typical project would see PfR installing onsite wind turbines capable of generating between two and 15 megawatts. The company would cover the entire investment.
The chief executive of the Carbon Trust, Tom Delay, said that PfR could now provide a significant boost to Britain's hopes of meeting the EU target of generating 15% of energy from renewables by 2020.
"This is one of the largest renewable developments in the UK and, uniquely, it will be developed on public-sector land," Delay said. "This is an opportunity for the public sector to make its contribution to renewable power without taking its eye off the ball of whatever it's supposed to be doing."
The partners say they are already talking to more than 100 public-sector organisations about wind projects, including Oxford city council and Reading University.
Public-sector bodies own tens of thousands of buildings and about 10% of land in the UK.
Stephen Ainger, the chief executive of PfR, said: "The public sector owns more than 1m hectares of land. Even if a small proportion of this land is utilised for renewable energy development, it has the potential to make a significant contribution towards the fight against climate change. Today's announcement provides us with the financial means to deliver the economic and environmental benefits associated with renewable energy to the public sector without diverting their resources away from frontline services."
In last week's budget, the chancellor, Aliastair Darling, announced that he wanted all public sector buildings to be zero-carbon from 2018. Environment Secretary Hilary Benn welcomed today's announcement, saying:
"There is enormous untapped potential for generating renewable energy on public sector land. As we explore every opportunity to generate renewable energy, making the most of the potential for public sector renewables is more important than ever. I'm delighted that the Carbon Trust has secured a partner on commercial terms for their PfR venture, which demonstrates the very real market opportunities for action on public sector sites."
John Sauven, Greenpeace executive director said: "This is an excellent example of private finance delivering real emissions reductions through innovative partnerships. It also demonstrates that significant cost-effective renewable energy potential exists at all levels rather than simply in industrial-scale wind power, and that a viable business case can be made for this investment. Within the context of the UK's demanding emissions reductions targets, we sincerely hope this is a sign of things to come."
