When Osborne arrived back from his visit to China earlier in the month, he was like the cat that got the cream. Here, he trumpeted, was a new dawn for UK investment – with the Chinese apparently only minutes away from snapping up British assets. Time enough perhaps, for everyone to dust away the cobwebs and hang up the ‘for sale’ sign.
24 hours later, the news broke that a Chinese sovereign wealth fund was to acquire a 9% stake in Thames Water. The deal – as if it wasn’t transparent enough – was then rather amusingly highlighted in some of the UK & European press with a rather tasteful shot of a glass of tap water, complete with City of London backdrop.
All in all, it was the sort of thing that was in danger of Osborne believing his own hype and considering the trip a success – a job well done.
Only it wasn’t. In fact, it was a bit of a damp squib. You see, as investments go, acquiring a stake in a UK utility is never going to set the world alight.
Yes, it’ll provide safe and dependable recurring revenues and yes, for the Chinese it’s a foot in the door into the potentially lucrative London markets. However, you’d be hard pushed to consider it anything more than that. And for Osborne – and indeed the UK government’s wider drive for overseas investment – it can hardly have been the deal of the day. Truth be told, it would barely warrant a delegate trip to China.
No, what Osbourne was really looking for was a much bigger investment. The sort of investment that that would pour fresh capital into expensive (and risky) new UK infrastructure initiatives and energy assets.
The fact that he didn’t, was the deal’s real significance. And for the UK offshore wind energy industry, it was that, that was really worthy of note.
Let’s be clear – it’s not that the capital required for offshore wind energy isn’t out there. Rather, it’s that we simply can’t rely on others – even those in government – to negotiate and attract this level of finance on our behalf. Osborne may well try to do his bit but that alone does not guarantee success. Better to fight our own battles and engage on our own terms. It's too important a task to others.
The Inflation Reduction Act has sparked major optimism in the US renewables sector, but wind installations still fell 37% last year.