The UK has climbed to fourth in Ernst & Young’s annual Renewable Energy Country Attractiveness Indices (RECAI), however, the report warns that not enough is being done to sustain current high levels of investor activity.
Ernst & Young notes that the slew of recent government announcements related to the country’s energy policy have done little to instill confidence in the UK’s renewables sector. Over the last three months details were released for the proposed contracts for difference (CfD) scheme, increased powers for the Green Investment Bank (GIB) and the Energy Bill secured its passage through to the House of Lords.
However, the report claims that the announcements were long overdue and did not give renewable investors cause for confidence in the long-term direction of policy. Ben Warren, environmental finance leader at Ernst & Young commented: “The flurry of government announcements has been welcomed with a sigh of relief by the sector and contributed to the current hiatus of activity and the UK’s improved position in our index. But, what we are witnessing is nothing more than basic, isolated measures that had been stalled for way too long.
“Much work is still needed to convert this patchwork of measures into a complete, balanced and strategic plan that will sustain activity in the long term. After a long period of silence, the government is now playing catch-up with investors who are not short of opportunities in other countries. While these announcements come as a pleasant surprise, this is no time for complacency, as important pieces of the jigsaw are still missing if we want to produce an attractive framework.”
The report highlights that, although the announced strike prices appear favourable, they are still subject to consultation and state aid approval – a fact that causes investors to crave more detail to fully assess the associated risks and rewards.
Warren concluded: “Overall, the sector’s positive reaction to recent announcements and current high level of activity point to a liquid and buoyant renewables market. Global investors and developers, however, need more than piecemeal policy details. The Government must come up with a credible and consistent energy plan that offers in a timely manner the clarity and information required to make long-term investment decisions”.
