The UK renewables industry is concerned about the future of UK energy policy according to an industry confidence survey published by the Renewable Energy Association (REA).
A survey of 68 senior managers involved in the renewables industry has revealed that many share serious concerns over the future of renewables in the UK. The biggest concerns revealed by the research centre around the Energy Bill. More than half of all respondents indicated that Contracts for Difference (CfD) “will not be effective in bringing forward new renewable power capacity. Crucially, 69% of respondents believe that the lack of emissions target sends a ‘poor’ or ‘very poor’ message to potential investors.
Commenting on the results, REA chief executive, Gaynor Hartnell said: “The UK has to achieve a higher growth rate than any other Member State in order to reach its 2020 renewables target. Mixed messages remain a problem and industry needs policy certainty and political consistency. The prize is up to 400,000 jobs by 2020, economic growth and greatly improved energy security.”
Over 60% of companies surveyed expected employment levels to remain stable, whilst 26% anticipate employment levels to rise over the next six to 12 months.
The REA will be assigning a ‘Renewables Industry Confidence Index’ score to all future industry confidence surveys to allow for better analysis of the state of the industry. A score of 100% would represent absolute certainty and a flourishing industry. The inaugural survey has been given a score of 47% – reflecting the serious concerns held by the industry surrounding CfDs, the Renewable Heat Incentive (RHI), the route to market for independent generators and the setting of an explicit emissions target.
One of the survey’s respondents, Andrew MacLellan, director of ENER-G, noted: “Lack of regulatory and incentive stability, with a three to five year outlook, is proving a major obstacle to investment in the sector. Last year it was the RO review, this year it is EMR.”
Steven Edrich, head of strategy at 2OC, added: “Continuing uncertainty over EMR and how the RO will be left to work beyond 2017 are crippling industry’s ability to look ahead and making it very difficult for banks to approve funding on projects now.”
An anonymous financier said: “There is no shortage of capital for energy projects but it is an international market and many other countries are perceived as more predictable and trustworthy than the UK.”
The majority of respondents to the survey expressed satisfaction with the state of the feed-in tariff, especially when compared to the fledgling RHI scheme.
Sam Tilley, managing director at Infinite Energy, concluded: “The continued failure to set the RHI for domestic renewables continues to cause uncertainty in the market. However, on the plus side the commercial solar PV market is very stable at the moment which is driving business, and the launch of the new MCS Guide, which is very good, actually makes it a very nice environment to work in at the moment.”
Overall, 65% of those surveyed had ‘poor’ or ‘very poor’ confidence in the renewable heat and electricity sectors’ regulatory framework.
A DECC spokeswoman told Solar Power Portal: “The REA’s report points out that many in the industry expect employment to increase over the next 6-12 months. We’re already seeing major investment from global firms in the UK renewables sector and supply chain.
“Already 12% of all the electricity we consume comes from renewables and we are well on track to delivering our 2020 renewables goals. The Energy Bill and reforms to the electricity market will further incentivise investment in renewables, giving greater certainty on investment returns and lowering the cost of capital”.