Guernsey and Jersey could be showcases for clean technology investment within a few years, according to Steve Lang, a partner at Ernst & Young and head of the firm’s UK and Ireland cleantech practice.
Clean energy will form the basis of the world’s first predictable industrial revolution as carbon resources dwindle and climate change becomes an increasing global problem, he says, and the Channel Islands are a natural choice not only for cleantech financial services but physical demonstrations of low-carbon technologies.
Lang believes the islands have the potential to be at the forefront of cleantech research and development. “Anecdotal evidence suggests that Luxembourg and Dublin are ahead of the Channel Islands in terms of marketing to cleantech investors and funds,” he says.
“But considering the size of Guernsey and Jersey’s population and their huge range of natural resources, the islands could embrace and capitalise much more on their green credentials.”
Global investment in clean technology research and development has risen from USD50bn in 2004 to an estimated USD200bn last year, and is forecast to reach USD500bn by 2020. The UK government, for one, has announced plans to make clean energy dominant by 2030.
“The Channel Islands could become an appealing test bed for clean technologies to help stimulate inward investment,” Lang says. “There is potential for wave, tidal, solar and wind technology, and potentially electric transport.
“Although harvesting many of these resources could be five to 10 years away, decisions taken now will shape the landscape of the Channel Islands’ energy footprint in years to come.”
Chris Matthews (pictured), a partner at Ernst & Young Jersey, notes that several green and cleantech funds are already domiciled in the islands, investing in solar energy, wind farms, wind turbine manufacturing, reforestation and the recycling of energy from waste.
“Sovereign wealth funds and venture capital funds are directing capital to technology start-ups,” he says. “The nature of the investor depends on the kind of investment – solar and wind farms, for example, are relatively stable, while other investments may carry more risk.”
The financial reasons for investing in cleantech in the Channel Islands are the same as for other areas of investment, Matthews adds. “Tax neutrality means investors are not double-taxed, and it’s a flexible regime in terms of regulation,” he says.
“Some structures are closely regulated through our collective investment scheme laws, while there are also funds that can be up and running within 72 hours, just requiring notification to the regulatory authorities.”
The islands’ professional services network meets the needs of the cleantech sector well, according to Matthews. “There are a number of projects up and underway – now it’s a matter of developing a coherent vision for them,” he says.
