Government pumps extra £18m into clean tech start-up fund

The government is to make a further £18m available to clean energy start-ups over the next year through the Carbon Trust, as it attempts to deliver a much-needed shot in the arm to the UK's clean tech sector.

Despite recent reports showing global venture capital investment in clean tech firms has recovered strongly in recent months, research from the Carbon Trust has indicated that only £66.5m was invested in the UK's clean energy sector last year – the lowest level for five years.

Tom Delay, chief executive at the Carbon Trust, said the sector had been badly hit by the cautious investment climate. "In the current environment, even the most promising companies are finding it hard to attract the funding needed to turn bright ideas into commercial success stories," he said.

Ed Miliband, secretary of state for energy and climate change, said the additional £18m in funding will help "safeguard" a new generation of promising renewable technologies. "Supporting green start-up companies with this capital means innovative ideas for low-carbon energy will be able to make it out of the lab and into the future energy mix," he added.

Analysis from the Carbon Trust predicts that early investment in offshore wind and marine energy alone could help to deliver a £70bn boost to the economy and almost 250,000 jobs by 2050.

The government-backed company said the new funding would focus on firms operating in areas where the UK could be a world leader, such as marine and wind power, fuel cells, solar photovoltaics, and smart grid technologies.

The new investment follows announcements last week that the Carbon Trust has backed funding rounds in Plaxica, an Imperial College spin-out developing next-generation biopolymers, and smart grid management technology provider RLtec.