Ideal location for new finance institution
Why should the UK's Green Investment Bank be based in Edinburgh? The answer lies in two words: expertise and proximity.
Scotland's capital has internationally-recognised skills in both finance and renewable energy and sits at the heart of Britain's green energy economy. This concentration of industry and know-how makes Edinburgh the ideal location for an institution focused on clean energy investment.
As leader of City of Edinburgh Council, I feel passionately about this opportunity. Although I couldn't be there in person, I was rooting for colleagues from Edinburgh Chamber of Commerce recently as they present our case at Westminster. Many partners across the public and private sectors are backing us, including Scottish & Southern Energy, Lloyds TSB, Edinburgh Business Forum, ScottishPower Renewables, Scottish Financial Enterprise, Scottish Enterprise and Forth Ports.
Basing the GIB in Scotland makes good sense in that it maximises the UK's clean energy potential. The GIB must be closely connected to where the action is. This creates a virtuous circle that we consider vital to the successful commercialisation of low carbon energy. Renewables activity and its sources of finance are best in geographical proximity.
Scotlands potential renewable energy resource is significant, estimated at a staggering 60 gigawatts enough to meet Scotlands current peak winter demand many times over. This figure represents approximately 75 per cent of the entire UK renewable resource and a sizeable proportion of the European Unions.
There is already a critical mass of activity in Scotland that can be harnessed to enable the GIB to make a real difference to the sector. Global green energy players that have chosen to locate here include Gamesa, Mitsubishi, Siemens and, most recently, the Korean engineering company, Doosan Power Systems.
Vattenfall, Europe's largest generator of renewable heat and Logan Energy, the US fuel cell specialist, are among those based in Edinburgh alongside two 'home-grown' pioneers: Aquamarine Power, developer of the world's largest operational hydro-electric wave energy converter and Pelamis, operator of the world's first commercial wave farm. Meanwhile construction of five offshore wind farm development sites in the Firth of Forth is expected to begin in 2014.
Edinburgh's universities are leaders in green technology development, with dedicated research centres including the Institute for Energy Systems at the University of Edinburgh, Heriot-Watt University's Energy Academy and the Scottish Energy Centre and Biofuel Research Centre at Edinburgh Napier University.
Coupled with this is a significant support services network including professional advisers, raw materials, components, engineering services and transport.
Critical among these is the financial know-how needed to help the capital intensive renewables industry commercialise its products and services. Edinburgh is the UK's second financial centre after London and Europe's fourth by equity assets. It is home to eight of the worlds 10 largest banking companies by assets, including many major players in the clean energy sector with a strong legacy in project finance.
Scotland has a solid track record in financing infrastructure projects across a range of sectors - 119 to date estimated to be worth more than s6bn and accounting for around 10 per cent of the UK PFI market. Scotland is also an international centre for fund management, with around 13 per cent of total UK assets under management, primarily in Edinburgh. These financial services strengths link Edinburgh to London, supporting investors around the globe.
The GIB could draw on this powerful cluster of assets and expertise to support clean energy projects across the UK.
Nowhere else in the UK couples a major financial centre with a renewables hub spanning early stage technology development through to the implementation of major commercial projects.
Within an hour's drive of Edinburgh, Glasgow and Dundee are also major players in the clean energy sector, while Energy Park Fife across the Forth is a world leading facility in renewables. In Scotland's North-East, Aberdeen has led the exploration and development of the UK's oil and gas reserves over the last 40 years and boasts unrivalled knowledge in conventional and clean energy. Increasing levels of activity in the North East of England and collaborations with Northern Ireland are helping to build this momentum.
Edinburghs positional advantages are unique it is both at the heart of this super region of renewables activity and readily accessible to the rest of the UK and internationally, with transport links including direct flights to 109 airports in 99 cities.
With a base in Edinburgh, the Green Investment Bank would be close to its core markets and key industry clusters, allowing it to accelerate commercialisation and reduce risk.
This could offer the UK's clean energy industry a powerful competitive advantage an opportunity it surely cannot afford to miss.