Drive to encourage electric cars leaves investors feeling flat
When Michael Gove announced plans last month to ban the sale of new diesel and petrol cars from 2040 he was met with complaints that Britain could not produce enough electricity to power the new generation of transport.
Even among entrepreneurs in the renewable energy industry, scepticism was widespread.
Justin Broadbent, 60, founder of Isoenergy, sees big obstacles to the mass introduction of electric vehicles, from a lack of charging infrastructure to a shortage of power. He says that the environment secretary's target of 2040 is close to meaningless, describing it is a typical government statement, pushing things out into the long grass . . . so that it will all be forgotten.
Other people are more enthusiastic. Nina Skorupska, 55, chief executive of the Renewable Energy Association (REA), says: We have to have that target because with that clear goal things will happen, markets will shift. If he hadn't said something, that would have been the real newsworthy aspect because other countries have already stepped up to the mark
Innovative small and medium-sized companies will be at the forefront of preparing Britain for electric vehicles, she says, from improving batteries to providing charging points and contributing to the electricity supply with small, renewable energy generators.
Isoenergy does just that, retrofitting buildings with renewable energy; from country houses, to schools and hospitals.
Mr Broadbent says: If you have an old mill house where a water wheel used to be, we can probably put in a water wheel or an Archimedes screw to generate electricity.The company, which is owned by a small group of its staff, has annual revenues of Â£4.5 million and employs almost 50 people.
He recognises the value in grand statements to catalyse the industry but says that these need to be backed up by concrete actions to give those at the coalface the confidence to invest. There is no long-term, proper policy that says companies like us can afford to make a 10-year investment.
Over the past two years significant changes in renewables policy have unsettled the industry. In December 2015 the government cut subsidies to householders installing rooftop solar panels by 65 per cent and closed the main subsidy scheme for large-scale renewable electricity projects.
Dr Skorupska says: That really has slowed things down; we can see that in terms of the jobs.
Research by the REA shows that 126,000 people were employed in the sector last year, which is a record. But growth in jobs slowed to 2.5 per cent, compared with 9 per cent the previous year. Some areas of the industry suffered more than others. John Macdonald-Brown, 45, chief executive of Syzygy Renewables, says: For people who built solar and wind farms, temporarily that market has been paralysed, because it's just not economic to generate energy with virtually no support and to make an economic return.
Syzygy works with property companies to install renewable energy generators in places where it can be consumed on-site, such as shopping centres and offices.
Mr MacDonald-Brown says: [Property companies] are under pressure from external forces, whether it be planning or EPC [energy performance certificate] ratings for buildings, but also from their investors who are saying, what are you doing to improve the performance of your assets?
He has grown Syzygy slowly over seven years, running the company out of cashflow and not borrowing any money while rivals have come and gone. What that meant was we didn't perhaps grow as quickly as a lot of other people. Those people have either contracted very quickly or sadly, in a lot of cases, gone bust.
That boom and bust has had an impact on skills in the industry, as tradesmen with abilities specific to renewable energy have gone back to what they were doing before.
Mr Macdonald-Brown says: A lot of the electricians with really good knowledge and experience are no longer working in the industry.
Christopher Jackson, 34, director of Flexisolar, says there is a silver lining to the subsidy cuts.
One can say that only the good companies are left standing. We had a lot of companies that were exploiting inconsistencies in the government subsidies, which have gone out of business because their business model was based on something that wasn't sustainable.
Flexisolar combines renewable energy generation, storage and electric vehicle charging for airports and car parks. It achieved sales of Â£200,000 last year but Mr Jackson says that figure will jump in the year to April 2018, because the company has already signed deals worth £6 million this year.
He adds that the renewables market needs to adapt to the new regime. Financial models have had to be rejigged; investor confidence needs to be rebuilt. On the customer side, the expectation of how much return on investment they get needs to be adjusted.
Mr Jackson believes that the renewables sector is in a better position now it is closer to standing on its own feet. The general view of the industry is, although we aren't making as much profit as we were three or four years ago, there is a lot more certainty in the market. A lack of subsidies allows for more strategic thinking, he says.
We prefer markets that are driven by new technology development, maturing technology, a good understanding of risk, high quality and long-term 10 to 15-year investment decisions, not short-term, subsidy-driven opportunities.
Having grown used to being buffeted by the whims of government policy, some people in the industry are relaxed about the potential impact of Brexit this is despite reports that, after leaving the European Union, Britain will probably scrap the EU target to get 15 per cent of all energy from renewable sources by 2020.
Mr Macdonald-Brown says: Businesses are making their own commitments, notwithstanding whatever the government has asked them to do. I don't think there will be a massive negative shift.
There is enough momentum now in this industry.
Charging points set challenge for greening of motor market
One of the biggest concerns about a mass rollout of electric cars is where they will all recharge their batteries (Josephine Moulds writes).
At present, the majority of electric vehicle owners charge them at home. John Macdonald-Brown of Syzygy Renewables says: These cars are not cheap at the moment, therefore it's relatively better-off people who are buying them and they probably have a drive or a garage where they can charge the car. That obviously will change over time.
Plans outlined in the Queen's speech indicated that petrol stations and motorway services would be required to install electric charge points. Companies such as London-based Engenie hope to capitalise.
Engenie offers electric vehicle drivers fast-charging points, where they can charge their car in 30 minutes for an 80-mile range. To prove its concept, it has set up seven charging points, which are free to use.
The company has raised £1.47 million via Syndicate Room, an online equity investment platform, to create another 70 points in supermarket car parks, shopping centres, and parking bays. It is also working with a bus maker, with the aim of charging buses at bus stops in three minutes, boosting their range by 20 kilometres.
Jeremy Littman, 44, founder of Engenie, is excited about Michael Gove's pledge to ban sales of new petrol and diesel cars from 2040. He said that the pledge gives everyone in the electric vehicles industry a solid timeline to head towards a complete mass market transformation.
This article originally appeared in The Times.