THE UK’s status as a top destination for renewable energy investors is under threat, according to a new study released today by Ernst and Young. The decline is largely due to a lack of clarity from politicians as to where renewables fit into the country’s energy mix.
EY says that the upcoming election in May is causing a gap in definite policy being made, with the parties simply rallying around cross-party agreements on climate change, instead of making commitments.
Ben Warren, energy corporate finance leader at EY, said: “The upcoming election means that we can expect an effective moratorium on energy policy. While it is encouraging that politicians are using this policy ‘down-time’ to issue cross-party pledges on climate change, there is little or no policy behind the rhetoric to convert this into concrete commitments.”
EY also highlighted uncertainty about the UK’s current contract for differences (CfD) regime, the competitively bid prices that generators are prepared to sell power at. The accountancy giant says it is unclear whether the system will be enough to generate investment in new projects.
Webber said: “The very slow passage of market reform and the late introduction of the CfD regime has made it very difficult for developers to sanction investment in new projects.”
The professional services company has released its 12th Renewable Energy Country Attractiveness Index, which shows the UK in eighth, its lowest position in 12 years, with its top 10 ranking under serious threat.
As well as domestic concerns, the report also highlights the threat to the UK from emerging foreign markets.
India has risen to fifth in the rankings – up from sixth – powered by significant investment, ambitious renewables targets, and policy reforms. Mexico has climbed two place from 24th to 22nd.
Polish and Swedish markets are also gaining traction.