Does the new Scottish National Investment Bank hold hope for wave and tidal?

The First Minister’s confirmation that a Scottish National Investment Bank will be up and running by 2019 could be good news for renewable energy.

While some green energy sectors can compete commercially, others can’t.
But comments made at an event to mark the publication of a report on the bank’s implementation on Wednesday give cause for some optimism.

Scottish Renewables asked the First Minister directly whether the creation of SNIB would lead to more support for marine energy.

She replied:

“One of the motivations behind establishing a bank is in filling gaps and being able to create markets or make more extensive the markets for some emerging sectors. Renewable energy is clearly one of those areas.”

Also speaking at the event was Tesco Bank CEO Benny Higgins, who had authored the report into the creation of a Scottish National Investment Bank.

In response to the same question, he said:

“Renewable energy is absolutely in the crosshairs of what is intended for the Scottish National Investment Bank.”

These comments echoed others made by both Nicola Sturgeon and Mr Higgins at the event.

Earlier, the First Minister had spoken of the new bank’s mission to “support innovative businesses with high growth potential” and to “help meet key economic, environmental and social challenges … which include decarbonising our economy”.

Also of relevance are comments by economist Professor Mariana Mazzucato, Director of the Institute for Innovation and Public Purpose at University College London, who advised on the bank’s implementation:

In a press release she said:

“Innovation requires patient strategic finance, and there is simply not much of that in the UK. Yet around the world state investment banks are taking centre stage in providing such finance for key social and environmental challenges of the twenty-first century.

“By making strategic investments and nurturing new industrial landscapes, the new bank will support the Scottish Government’s ambition to deliver smart and inclusive growth while transitioning to a low carbon economy.”

Further detail on the Bank’s implementation, taken from Mr Higgins’ report, includes that the bank should:

• Be publicly-owned and mission-driven, focused on supporting Scotland’s economic priorities and promoting inclusive growth
• Operate in an ethical and transparent way
• Cowork to crowd in, not crowd out, private sector investment
• Be supported by long-term capitalisation of at least £2 billion over the first ten years
• Become self-sustaining in the longer term, raising its own capital to fund investments
• Provide long-term, patient finance for both smaller firms and larger projects
• Create opportunities and new markets for the private sector to invest in.

Ms Sturgeon had opened her speech at the event in Edinburgh’s Quartermile by pointing out nearby Scottish success stories including travel firm Skyscanner and Edinburgh University’s research on marine energy, which focuses on the FloWave test tank.

Ms Sturgeon is right to point to the great work which has been done in emerging sectors like wave and tidal, and to the institutions which enable that work.

Her acknowledgement that Scotland should take pride in its record on renewables is to be welcomed.

What differed in Edinburgh on Wednesday was a sense that positive words could soon be followed by tangible action.

Whether the creation of SNIB will help sectors like wave and tidal remains to be seen.

But what is for certain is that keeping them front and centre in the debate on Scotland’s economic future is vital if Scotland is to reap the benefits of the valuable work which has been done to date.