The UK’s attractiveness as a destination for renewable energy investment has reached an all-time low and investment in new projects is expected to decrease drastically from 2017, according to Ernst and Young’s Renewable Energy Country Attractiveness Index, published today.
The report’s authors say the UK has slipped to an all-time low of 13th place amongst the 40 most attractive renewable energy markets globally, due to a combination of energy policy announcements that are now making their impact felt and the ongoing uncertainty surrounding the role of renewables.
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, as well as 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.
The report warns 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levels of activity which has been attributed to developers rushing to meet deadlines before support for renewables is withdrawn.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 noncommittal 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.”
The UK was not alone in its fall in the rankings as most European markets slipped down EY’s rankings while less mature markets across Latin America, Africa and Asia continued their ascent.
So-called “emerging” markets now represent half of the countries in the 40-strong index, including four African markets featuring in the top 30. This compares to just a decade ago, when only China and India were attractive enough to compete with more developed markets for renewable energy investment.
Read the full report: Renewable Energy Country Attractiveness Index
Onshore wind races RO deadline (members only)