The UK renewable energy sector has continued to lose its appeal to investors, dropping to a new all-time low in EY’s table of the world’s most attractive renewable energy markets.
The firm said uncertainty caused by Brexit, the dismantling of the government’s Department for Energy and Climate Change (Decc) and the approval of the Hinkley Point C power station have seen the UK fall to 14th place for the first time in EY’s Renewable energy country attractiveness index (Recai).
Ben Warren, EY’s head of energy corporate finance, said: “Continued uncertainty around the government’s energy policy has created a confusing picture for investors seeking a low-risk return. In addition to radical changes to its structure, the government has decided to press ahead with investment in forms of energy that either don’t seem to have the public’s backing, such as shale gas, or have been deemed costly.
“With one more big decision, this time on the future of untested tidal lagoon technologies, expected in the coming months, the government clearly believes that easy to deploy and cost efficient technologies such as onshore wind and solar are not the answer to the UK’s energy security conundrum.”
The emergence of the battery storage market offers the potential to boost investment, according to Warren. He said: “The last 12 months have seen a significant increase in investment in battery storage technology in the UK. The availability of contracts and continued research and development investments, particularly in the US, will continue to drive down costs and improve returns from investment in battery storage.
“No doubt there are still challenges to be overcome and questions to be answered around affordability and availability. But if the market is ready and willing to innovate, battery storage, coupled with renewables, can help improve reliability and consistency of output to create a far more attractive sector.”
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