David Willetts

Stable policy and massive infrastructure needs will limit the impacts of a looming double-dip recession in one of the world’s leading advanced economies, a government minister told Breaking Energy last week.

Ccleantech is sufficiently developed in the UK to ride out economic troubles, Minister for Universities and Science at the Department for Business Innovation and Skills David Willetts told Breaking Energy in an exclusive interview.

“Cleantech can’t be completely insulated from recession. But it has now got such strength in depth [that] it is not a fragile vulnerable industry that can’t ride out recession. Focus on energy costs – and for us in the UK on high tech growth – [mean] clean tech’s prospects are if anything are improving because of the need to reduce costs.”

Britain’s economy contracted by 0.3% in the last quarter of 2011 and the first quarter of this year, according to the UK’s Office for National Statistics. But as the country struggles with stimulating the economy back into growth, the UK’s Coalition government has estimated that £200 billion will be required to replace the nation’s aging fleet of power stations and upgrade its energy infrastructure.

Policy is Paramount

Willetts told the Cleantech Open Conference in Santa Clara, California, that UK policy
provided a stable environment for clean energy development.

The Renewable Heat Programme was a world first incentive to generate heat through renewable sources like biomass and solar. The Green Deal was introduced last year under the Energy Act 2011 to eliminate upfront costs to energy efficiency upgrades in homes and businesses to “further decrease the barrier for adoption of those technologies”, he said.

The UK also has feed in tariffs, mostly used by small-scale solar, alongside a Renewables Obligation, mostly used for large-scale wind and has set a target to generate 15% of its electricity from renewable sources by 2020.

Read more about the UK’s energy policy debate here.

He told the room of cleantech startups and investors: “I hope that we in the UK can work with you in the US both through supporting the science through helping it commercialize and ensuring that there are British and American investors backing it … providing a marketplace where those ideas can reach consumers.”

In earlier comments, Willetts told Breaking Energy, “These kinds of funding incentives is where Britain is a world leader. The UK has some good national policy and programs that create an incentive to apply clean technologies. That’s where we’re ahead of the US. Clearly, while we have our own venture capital networks they are wider and deeper in the US.

“I feel quite upbeat about what we’re capable of in Britain. But our universities have in the past 10 or 20 years got much better at making links with business and within [my department’s] £4.6 billion ring-fence there’s £150 million a year that goes into the higher education and innovation that pays for universities to build links with business.”

I feel quite upbeat about what we’re capable of in Britain” – Willetts

But he said that the UK could do more to prevent companies from falling into the valley of
he was already trying to align objectives between research institutes and the Technology Strategy Board, a government agency aiming to stimulate economic development through innovation.

“Our problem in Britain – what I’ve learned about the US – US research institutes fund product ideas much closer to commercial product – they go much further downstream.

“They take on more risk and reduce the risk before a VC comes in. In Britain, our research councils traditionally stopped quite a long way upstream and then we beat up on ourselves – [as to] why won’t the VCs invest.

“The truth if it’s just a smart idea – that’s not enough. But there is probably more that we can do.”

The minister also announced that the first Cleantech Open Conference would take place in the UK next year.