Britain's renewable energy revolution suffered an abrupt setback this winter when the power supplied from wind, hydro and other "clean" sources fell, despite years of promises and policies to end the nation's dependence on fossil fuels and slash global warming pollution, the Guardian can reveal.
The news comes as the government will tomorrow unveil a major report (pdf) into how it will pay for the hundreds of billions of new spending needed to meet the UK's targets for renewable energy and cutting climate change emissions by setting up a new Green Investment Bank (GIB).
Figures from the Department of Energy and Climate Change (pdf) show that the proportion of electricity supplied from renewable sources such as wind and hydro power fell 7.5% in the first three months of this year compared to 2009.
The drop was officially blamed mostly on a dry winter, which reduced power from water turbines, and low wind speeds, leading to the lowest absolute supply from those two sectors for four winters – as far back as the DECC figures recorded.
Experts also expressed concern that renewable energy could also have suffered from a hiatus in investment and from competition from cheap gas from overseas, as the government figures showed the UK became a net importer of gas for the first time in more than 40 years in January to March.
The latest renewable energy figures will be seized by critics and other experts who have long argued that the UK needs fewer reports and targets and more action to support and fund the long-promised low carbon transformation.
"It's absurd that despite having one of the best green energy resources in Europe, too many UK renewable projects struggle to get off the ground," said Andy Atkins, executive director of one of the country's biggest environmental groups, Friends of the Earth.
"The coalition must keep its promise to be the greenest government ever by making it easier for renewable energy projects to take off – and creating a well-funded green investment bank focused on making Britain a world leader in a developing a low-carbon economy."
The message of urgency is likely to be seconded by tomorrow's report from the independent Green Investment Bank Commission, which will call for government to use fast-track legislation to set up the new bank, which could begin operating next year.
James Cameron, executive director of clean energy investment manager Climate Change Capital and a member of the six-person commission on the GIB, said there was concern that there had been a slowdown in renewable energy projects because of the recession, and because of uncertainty of government policy under the new coalition government.
"If people are expecting this institution [the bank] to exist with a range of products which might lower the cost of capital, they'll wait until it does," he added.
The Green Investment Bank Commission, set up by Chancellor George Osborne while the Conservative party was in opposition, is expected to recommend a bonfire of green business quangos, whose more than £2bn a year in grants could be used to fund the bank.
It also wants an estimated £40bn from sale of permits to pollute under the European trading scheme from 2012 to 2020 to be ringfenced to support the drive to decarbonise Britain's economy.
Pension funds, other institutional investors and even ordinary savers would also be offered a chance to contribute to the low-carbon revolution by buying green bonds and green individual savings accounts, under the plans.
The bank could use the money to focus on off-shore wind power, a new "smart" grid to enable the best use to be made of renewable energy, and big schemes to make homes more energy efficient – including the government's pledge of a "green new deal" offering homeowners up to £6,500 each for improvements to cut emissions from their energy use, says the report. It suggests the total spending needed on renewable and energy efficient infrastructure will be £550bn by 2020.
The coalition government has said it will publish details of the new bank after the autumn spending review.
The DECC Energy Statistics for the first quarter of 2010 show renewable electricity fell from 6.7% to 6.2% of total supply. Supply from coal power also fell, while nuclear and gas generation increased, bringing the total electricity supply up slightly, by 1.1%, although consumption of electricity fell fractionally. Total energy consumption, including heating, fell by 1.1%.
RenewableUK, the industry lobby group, said the ongoing increase in wind power would reduce problems from relying on hydro schemes as climate change was expected to bring an era of less reliable rainfall.
However Sir David King, the government's former chief scientist and director of the Smith School of Enterprise and the Environment at Oxford University, said the figures highlighted the need for new nuclear generators to help cut emissions and keep power supplies reliable. "We can't rely too heavily on wind because it always requires a gas-fired turbine to be able to be switched on to provide alternative energy," he said.