Report: Government ambiguity leaves UK renewables sector in limbo

The UK Government’s frequent renewable policy alterations and subsidy announcements seen since the launch of the feed-in tariff have bred uncertainty in the renewables marketplace, preventing strong investment in the sector.

These are the findings from Ernst & Young’s latest quarterly global renewable energy Country Attractiveness Indices report (CAI), released today. The indices provide scores in 40 countries for national renewable energy markets, renewable energy infrastructures and their suitability for individual technologies.

Ernst & Young’s report finds that the UK has now risen to fifth place in the renewables index, yet this is more to do with the economic conditions in Italy, and less to do with the country’s renewables progression. In fact, the indices has found that since the frequent policy and subsidy announcements made during the second quarter of this year, the general consensus among industry players is that the changes have delivered little certainty for investors.

Those working in the UK renewables industry have dealt with fast-tracked feed-in tariff reductions, policy mechanism alterations, Renewables Obligation delays and disagreements within the coalition during the past two years, calling into question the much-touted promise to become the ‘greenest Government ever’.

Ben Warren, Ernst & Young’s Energy and Environmental Finance Leader, comments: “The lack of clarity and detail from various policy announcements, and the ambiguous messages coming out of the Treasury and DECC, has been frustrating for the renewable sector. More importantly, the ongoing uncertainty risks delaying much needed investment further, undermining the UK’s ability to achieve its 2020 targets and benefit from the creation of green collar jobs.

“Over recent months, it has become more apparent that the Government is beginning to favour a dash for gas to deliver energy security, and will prioritise decarbonisation of the energy sector in the 2030s, a decade later than planned. If this is the case, it smacks of yet another example of leaving it to the next generation to pay for our ways.”

It is still hoped by many working in the UK solar sector that the new feed-in tariff degression model will offer some certainty for industry and investors alike, however the recent installation figures remain low in comparison to previous months and are yet to show signs of increased investor certainty.