08/05/2012 13:03 BST

Energy Entrepreneurs Fund To Drive 'Innovation In Low Carbon Technology'

As part of its drive to fulfil its oft-derided pledge to become the 'greenest government ever', the coalition recently announced a new drive to stimulate environmental innovation.

In late April it launched the £35m Energy Entrepreneurs Fund designed to help small and medium sized businesses develop and demonstrate innovative low carbon technologies.

Announcing the initiative on the eve of a major conference in London, Ed Davey, the energy and climate change secretary, said part of the way the UK was going to tackle climate change and get clean energy is through innovation, particularly with SMEs.

“The first wave is going to be in energy efficiency in buildings, things like advanced lighting, heat pumps, ventilation technologies and so on," he said.

"This is a practical way that we can make sure we get to the low carbon economy.”

Companies will be able to apply for up to £1m funding from government, and can then are encouraged to use that funding to leverage additional funds from private sector investors.

According to the government, a "panel of investors" will provide advice to DECC on picking the companies to support.

Of the £35m, £20m, from DECC’s Buildings Innovation Programme, will initially support energy efficiency technologies, for example advanced lighting, heat pumps, ventilation technologies. Details of the application process will be available by the summer. £15 million will expand the call into power generation at a later stage.

However the government's approach is not without its critics. Caroline Flint MP, Labour’s shadow energy and climate change secretary, said minister's had failed to get behind British green businesses and jobs.

"The UK should be a world leader in the transition to a low-carbon economy, but since this government came to power, investment in clean energy has fallen, meaning that jobs and growth that should be coming to this country are now going overseas," she said.