The Green Investment Portfolio will give local authorities, developers and third sector organisations an opportunity to bid for investment in renewables, waste, transport and the circular economy.
“Scotland is determined to lead the transition to a net-zero carbon economy, and we have been clear that we must leave no-one behind,” said Sturgeon, who was appearing at the Ethical Finance 2019 conference in Edinburgh.
She added: “With 85% of the finance for this transition coming from the private sector, we must do everything we can to help all parts of the economy contribute to net-zero emissions by 2045. The Green Investment Portfolio supports our ethical finance ambitions by matching projects which are reducing emissions with investors so we can fully maximise their potential and promote them globally.”
She mentioned that successful projects could include reducing industrial emissions, improving buildings’ energy efficiency and restoring peatlands.
“Our aim is to take to market a £3 billion portfolio of investable projects over the next three years,” she told the conference. The first tranche of projects is expected to be launched in the spring and will receive marketing and development advice to help attract private sector investors.
On Wednesday, the Department for Business, Energy and Industrial Strategy (BEIS) opened a consultation on the final design of its £315m Industrial Energy Transformation Fund (IETF), announced in the 2018 Autumn Budget.
The fund is designed to help virtually eliminate industrial greenhouse gas emissions by 2050. Combustion activities (largely the power sector), refineries and process emissions released the equivalent of 82 million tonnes of CO2 in 2017, almost a fifth of the national total.
IETF is intended to support business with heavy demand for energy to decarbonise or improve their energy efficiency until 2023/24. The consultation seeks views on who should be eligible for it, which technologies it should support (and at which stage in development), alongside what forms of funding should be provided.
The fund will sit alongside the £250m Clean Steel Fund, £140m being spent on industrial hydrogen systems, the £170m zero-carbon Industrial Clusters Mission and £66m Transforming Foundation Industries Challenge.
BEIS proposes that the IETF should be available to:
Deploy “mature energy efficiency technologies” for industrial processes.
Deploy “deep decarbonisation technologies” such as industrial carbon capture, switching to hydrogen or biomass and material efficiency. They need not be as mature as the first category and some projects could be demonstrated at scale for the first time, but they cannot be mere prototypes.
Conduct feasibility and front-end engineering and design studies.
Build capacity, where companies lack technical expertise for such studies.
The consultation paper emphasises that only projects that would not happen without government support will gain funding, largely through grants via a competitive bidding process. Some energy efficiency projects may be supported through loans.
The electrification of transport and the heating, cooling and lighting of buildings are specifically excluded. Although the focus is on manufacturing industry, other businesses such as data centres or laundromats may be eligible for funding too.
BEIS plans to split the IETF into two phases. The first, worth £30m, would back all eligible project categories but deep decarbonisation. It is expected to be launched in the spring.
The second, £285m phase would cover all four categories, either through several bidding windows or perhaps one.
Responses should be made by 21 November.