The UK has fallen to its lowest position in 12 years on Ernst & Young’s (EY) Renewable Energy Country Attractiveness Index which charts countries' appeal for investment in renewables.  

The UK is now the eighth most attractive to invest in renewables according to EY’s standings, after it was leapfrogged by France. The consultancy firm’s latest renewable energy country attractiveness index shows the UK slipped down the quarterly rankings for the fourth successive time. Ernst & Young attributes the UK’s fall to a lack of clarity over the role renewables will play following the election in May.

The newly-finished contracts for difference (CfDs) has also been singled out for criticism, with industry members questioning whether the new regime will sufficiently stimulate the level of investment required to boost renewable deployment.

Ben Warren, energy corporate finance leader at EY explained the latest rankings: “The UK’s CfD regime should, on paper at least, deliver the lowest possible cost of energy to the consumer. The challenge is whether renewable energy, having proven itself to be cost effective, is really given a level playing field and sufficient budget to fulfil its potential.

“However, the CfD regime as it stands does raise some questions.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 UK solar sector certainly expressed its disappointment at the results of the first CfD allocation round, which saw just five solar projects win funding. EY also warns that international competition for renewables investment is hotting up, hampering the UK’s ability to attract investors further.

Warren explained why the policy inertia that will surround the upcoming General Election will put off investors, he 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. As a result, the role of renewable energy in the UK’s long-term energy strategy remains unknown at a time when it has become affordable, quick to deploy and can deliver real  jobs for the UK’s economy.”

Back in September 2014, EY stated that the upcoming CfD regime would “have to go a long way to repair the damage of recent policy mishaps” – with particular reference to the government’s decision to remove renewable obligation support for solar projects over 5MW.