Macquarie set to buy UK’s Green Investment Bank, but green mission to be protected

The environmental credentials of the UK Green Investment Bank (GIB) will be kept intact on the announcement that five selected shareholders will retain a special voting power following the bank’s sale, most probably to preferred bidder Macquarie Group.

The Australian bank bid for 100% of the government-owned entity and will have to pay about GBP 1bn ($1.22bn) for the equity stake, in addition to funding future investments and meeting outstanding capital commitments of GBP 1bn, said a spokesperson for the Edinburgh-based bank.

This ‘golden share’ retained by the five shareholders, which were nominated by a GIB committee, will help allay concerns that privatising the investor would put the bank’s carbon reduction mission at risk. Since 2012, the GIB has invested in renewable energy and energy efficiency measures to support the country’s carbon reduction commitment. The government announced that it would privatise the bank in March this year.

The nominated trustees include lawmaker Robin Teverson, chair of the House of Lords’ European Union select committee on energy and environment, and Trevor Hutchings, WWF’s director of advocacy.

In other European news, last Friday Germany’s economy ministry announced that it will limit cross border power trading with Austria from July 2018. The German regulator, Bundesnetzagentur, has requested that power trading be limited to what can be transported on cables between the two nations – aiming to rule out the problem of indirectly routing power through neighbouring countries when power generation exceeds the capacity of the cables.

The effect on power prices in the two countries will be muted, according to a BNEF Analyst Reaction on the topic. The large-scale of Germany’s power market will provide a buffer to any change, while average Austrian power prices will be little affected: “[Austria’s] 2015 net imports would have dropped by only 12% if the cap is applied to historical data,” the note says.

On the other hand, China is purposefully looking to export its excess generation power to other Asian countries, in an effort to reduce the amount of idle capacity it has sitting unused. State Grid of China, China’s largest electricity distribution operator, is considering building high voltage power lines to India, South Korea, Japan and Southeast Asia, said Zhang Qiping, chief engineer of State Grid, at the Bloomberg New Energy Finance Summit in Shanghai this week. Installing such long-distance transmission lines would deliver power to regions with inadequate supply, would reduce the cost of electricity and would provide additional flexibility to deal with the growing amount of variable renewable energy in the region.

In the US, Elon Musk fired up the rooftop solar industry last week when he presented a new form of solar tile that can be gracefully embedded into normal roof tiles, disguising the fact that they are there at all. The uniquely-designed glass tiles come in a range of style to suit a variety of roof types and are embedded with high-efficiency photovoltaic cells, according to the statement by Tesla.

Also in the US, a 79,000 acre-site off the coast of New York has attracted interest from European energy companies Statoil, Dong Energy and Electricite de France – all of which have qualified to bid in a federal auction to secure a lease for the site, large enough to install 800MW of offshore wind turbines. The US Interior Department has scheduled the auction for 15 December.

In other wind energy news, India is vying to introduce more competition and lower tariffs in its wind industry, with the introduction of a programme to set up 1,000MW of interstate grid-connected wind power projects, to be awarded through reverse auction. The process of open competitive bidding has been successful in bringing down the cost of solar energy in India and the hope is that it will do the same for wind energy.