The UK has once again slipped down international rankings for attractive renewable energy markets after the new government’s decisions to close the Department of Energy and Climate Change (DECC) and approve Hinkley Point C “dealt a blow” to the country’s prospects.
This was the conclusion of the latest Renewable Energy Country Attractiveness Index (RECAI) from EY, which records market changes around the world. It claims the UK’s renewables sector faces uncertainty following a summer and early autumn full of new developments.
While acknowledging the impact of the UK’s decision to leave the European Union, EY’s report points to the new government under Theresa May and the decisions it has made since the vote.
Coupled with Brexit uncertainty, it claims the Whitehall reshuffle, which saw the formation of the Department of Business, Energy and Industrial Strategy (BEIS), and the green light given to Hinkley “have dealt a blow to the country’s already floundering renewable energy sector and its attractiveness in the eyes of investors.”
The report does point to the continuing success of the UK’s offshore wind sector which according to the Crown Estate, which owns the UK’s near shore, will supply the UK with 10% of the country’s electricity demand by 2020.
For comparison, Hinkley Point C will supply 7% of the UK’s power although it remains unclear when the site will be operational.
However, the report states: “Despite this progress on offshore wind, the UK’s renewables sector faces an unknown future as the country negotiates its future relationship with the EU, and May’s new administration comes to grips with a power sector in turmoil.”
It also points out that solar, referred to as one of “the deepest and most easily deployable technologies”, is absent from the government’s plans.
EY’s assessment of the UK renewables landscape is one of the first to point to widespread uncertainty caused by May’s actions since being named leader of the Conservative Party.
Many, including the trade associations, the former Energy and Climate Change select committee and a number of private firms, have claimed BEIS offers an opportunity to form a joined up business, industrial strategy and energy approach to policy.
However, EY has claimed the Whitehall change has raised concerns about the commitment of the new administration to climate policy and clean energy, putting investors off further.
The UK has consistently dropped down the EY ranking in recent years, falling from fourth place in August 2013 to 14th in this month’s update, dropping out of the top ten for the first time in September 2015. In addition, the UK has also fallen out of the World Energy Council’s energy trilemma index top 10 for the first time and has since been place on a ‘negative watch list’.