The bold and the brave
Limited funding opportunities and inadequate policies are holding British businesses back. Urgent ch
During his speech at the Tory party conference, George Osborne was crystal clear about his approach to the environment. He pledged that the UK will not cut its carbon emissions any faster than other European countries, signalling an end to his previously stated ambition for the UK to take a leading role in the low-carbon economy. Also announced at the conference were plans to raise the speed limit to 80mph - a policy that our panellist Julia King pointed out could result in an increase in emissions equivalent to the savings gained from insulating three million lofts, three million cavity walls and one million solid walls. Meanwhile, Ed Gillespie, speaking previously at the Labour Springboard event (see page 10), outlined the need for joined-up thinking on climate change across government. These announcements suggest this message is yet to be heard.
The role of government
Does the coalition still believe that they can be the "greenest government ever"? The subdued mood at this event, when compared to that at the Labour and Liberal Democrat conference events, suggests delegates were perhaps not so sure.
However, Greg Barker, the most senior Tory to carry the climate change torch, still aspires to this goal. Speaking about growing the low-carbon economy, he argued that green growth should not be separated from wider economic growth and that the policy levers required to stimulate the former are not dissimilar to those required to encourage growth in all sectors. More specifically, he argued that it was the government's role to create the conditions under which low-carbon enterprise can flourish. However, unlike Labour's vision of creating these conditions through direct funding and subsidies, Barker argued our economic circumstances dictate the end of unlimited subsidy as a viable or desirable policy option. Instead, the policy framework his party is pursuing is one focused on engaging the private sector with deregulation and lower taxes.
Early stage, high risk investment is what small businesses need.
Barker did however note the importance of particular top-down approaches, such as the Technology Strategy Board (TSB) which has a role to play in nurturing innovation, demonstrated through its recent £30 million support for offshore renewables.
However, Stephen Voller of Cella Energy, a 2011 Shell Springboard Award winner (see opposite for more), suggested while the TSB is useful for a certain tranche of firms, it is not the right vehicle to nurture low-carbon entrepreneurs in the early stages of their business development. Professor Julia King, academic and Fellow of the Royal Academy of Engineering, noted this was not surprising since the TSB was never designed to provide this type of funding. This was previously the role of the Regional Development Agencies, but since they were abolished, SMEs have been forced to look elsewhere for help, with many coming to the TSB.
Early stage, high risk investment is what small businesses need but struggle to find. The limited market for venture capital investment in this country is a great contributor to this funding gap. Voller believes that this is partly because the UK does not have the right tax incentives to encourage high net worth individuals to invest at this introductory phase. The result is the loss of intellectual property from the UK and a missed opportunity to provide international leadership in the low-carbon economy. Cella's latest round of investment, for example, came from America, a result of the lack of funding available in the UK.
What help is there for small businesses at this critical early stage? The Enterprise Investment Scheme (EIS) is designed to help small, high-risk companies, such as Cella Energy, and can be effective. But navigating the scheme can be a cripplingly complex and expensive task. Simplifying the application process for initiatives such as the EIS and ensuring short approval times are quick and easy ways in which the government can help make them more relevant for small businesses. Plugging this early-stage funding gap is the Holy Grail if we are ever to experience a green technology revolution.
Might the Green Investment Bank help? Our panellists believe it could, but without yet knowing its terms, it might not be worth holding our breath.
To infinity and beyond
The hydrogen storage firm that hopes to fuel the future.
By Stephen Voller
Cella Energy makes safe, low-cost hydrogen storage materials that have numerous potential applications ranging from fuel for vehicles and rockets, to high energy density stores to replace batteries, and also radiation shielding for satellites.
It is a company spun out of the British government's Rutherford Appleton Laboratory (RAL) near Oxford. It has strong links with the London Centre for Nanotechnology at University College London and the Department of Chemistry at the University of Oxford, and it has 35 investors spread across Asia, Europe and North America.
Despite this success, getting started was not easy. After producing the business plan in conjunction with Professor Stephen Bennington at RAL in the summer of 2010, we then fell into the problem that almost all UK technology start-ups face - that there is no appropriate venture capital industry. Finding funding for early stage businesses is almost impossible.
Fortunately we were able to secure funding through a trade investor, Thomas Swan & Co, which understood our business because it is one of the largest manufacturers of carbon nanotubes in Europe. But what we also needed was corporate credibility. Winning the 2011 Shell Springboard Award was a big help in achieving this. It is an endorsement that a large, global company has taken an interest in you and your technology and wants to say to the world: "We like it. You should also take this company seriously".
H is for hydrogen
Shell estimates the world demand for energy could double by 2050. At the same time, mankind must reduce the dependency on fossil fuels and reduce emissions. Governments and energy companies around the world all agree that hydrogen will play an increasingly important part in our energy needs in the coming decades.
During 30 years of the Space Shuttle program at the Kennedy Space Centre (KSC) NASA has developed unparalleled experience in handling very large quantities of hydrogen. Cella is also working at KSC to develop new products based on our unique hydrogen storage technology.
By weight, hydrogen has three times the energy of gasoline and burns cleanly without releasing carbon. However, it is difficult to keep and is typically stored at very high pressures, using expensive, heavy and potentially hazardous methods that are not practical for mass market adoption. The investment needed in a widespread refilling infrastructure would not be acceptable. Hydrogen also requires cylindrical or "bomb-shaped" tanks that consumer focus groups reject on the basis of perceived safety grounds.
Cella has changed all of this by taking existing solid state hydrogen storage materials and engineering them to make them safe to handle in air. The materials can be stored at room temperature and pressure so no longer require "scary-looking" tanks. Instead, the hydrogen can be stored in conventional vehicle fuel tanks or in small lightweight cartridges that look like batteries. It is stored 100 per cent safely and can be released quickly and cleanly. It is a low cost, scalable manufacturing process that has considerable industrial potential.
This is just one aspect of our business. We have also developed links with a number of strategic partners spread over the automotive, oil and chemical sectors and are working on a number of other projects. For example, we aim to create a reduced carbon fuel for use in vehicles. This will work by suspending hydrides in hydrocarbon fuels such as regular gasoline and diesel. Although not a long-term solution, it is a way in which some sectors can meet the increasingly stringent emission legislation without major changes to vehicles or infrastructure.
Other projects include using Cella's hydrogen storage materials to produce pure hydrogen fuel that can be pumped into vehicles in a very similar way to gasoline today; the production of battery chargers and battery replacements that have three times the energy density of a lithium-ion battery; and high hydrogen content materials that can be used as lightweight radiation shielding materials for space applications. We aim to fly test materials on the International Space Station ISS in 2012 -- an exciting project that has been given a major boost by the Shell Springboard Award.
Stepher Voller is chief executive of Cella Energy.
This article originally appeared in the New Statesman supplement, "The green tech revolution".