Posted on: 10/05/2016
A combination of historic energy policy announcements that are now making their impact felt and ongoing uncertainty surrounding the role of renewables in the UK’s future energy mix are undermining the sector’s appeal in the eyes of investors, a new report claims.
According to EY’s Renewable Energy Country Attractiveness Index (RECAI), the UK has slipped to an all-time low of 13th place amongst the 40 most attractive renewable energy markets globally – down from 12th in September 2015.
The report cites the Government’s decision to opt for gas and nuclear, instead of renewable energy, to fill an anticipated energy supply gap as the key reason for the UK’s fall. In addition, the early closure of the Renewables Obligation regime and the end of Contracts for Difference (CfDs) after a single round have limited the routes to market for electricity generated by onshore wind and solar power, contributing to the UK’s decline in the rankings.
‘Non-committal’ approach highlighted
The RECAI goes on to warn that investment in new projects could also decrease drastically from 2017, following current record levels of activity which has been attributed to developers rushing to meet deadlines before support for renewables is withdrawn.
Ben Warren, EY’s Energy Corporate Finance Leader said: “A non-committal approach to energy policy is putting the attractiveness of the UK’s renewable energy sector on a landslide.
“The current approach is going against the grain of almost universal global support for renewables and is masking the UK’s advantages – a growing energy imperative as ageing power plants are retired, strong natural resources and efficient capital markets.
“In the absence of real changes to the direction of policy support and greater demand for renewables in the energy generation mix post 2020, the only way for the UK in our Index seems to be down.”
> Read the report