Ernst & Young (EY) has warned that “political point-scoring” over energy policy is threatening billions worth of investment in renewables.
The company believes that the increased political posturing over rising energy bills has heightened investor uncertainty, potentially jeopardising the £29 billion of energy investment that has been announced between January 2010 and April 2013.
Ben Warren, environmental finance leader at EY commented: “Political squabbling is widening the time gap between investors announcing their intentions and taking action. As a result, the sector, and offshore wind in particular, are left susceptible to the mood of uncertainty.
“What we have also seen in the market is that primary funds secured for the construction of new renewable energy plants in the UK fell 45% between 2009 and 2012. If this trend continues, it could jeopardise billions worth of investment and thousands of much needed jobs.”
Despite the increased investor uncertainty, the UK has held its place as one of the top four most attractive countries to invest in renewables alongside the US, China and Germany. EY’s Renewable energy country attractiveness index shows that investment in clean energy was down 14% from the second quarter, making it “almost certain” that 2013 will mark the second consecutive annual reduction in new energy investment. The report also predicts that solar installations this year will outstrip wind capacity for the first time ever.
In order to hold its position for the company’s next report, Warren called on all UK political parties to come together, he said: “With the country facing decommissioning of old plants and a challenging 2020 renewables target, cross party collaboration is now needed more than ever to create a tangible, cohesive, long-term strategy for conventional and clean energy that will see investment intentions crystalise into action. Securing supply for future generations of energy users is too important an issue to be subject to political squabbles.”