EY: EU referendum and energy policy puts UK in 8th place for renewable investment
Contradictory energy objectives and the EU referendum concerning investors means the UK has remained in 8th place in EY’s Renewable Energy Country Attractiveness Index (RECAI), its lowest level in 12 years.
EY has urged the government to take heed of market signals to achieve its climate change goals and warned it must reconcile contradictory energy objective to boost renewable investment.
The attractiveness of investing in the UK’s clean energy sector is described as being “marred” by conflicting messages around the future of the country’s energy mix. Furthermore, the pledge to hold an EU referendum by the end of 2017 has “prompted nervousness around the UK’s commitment to long-term decarbonisation targets”, as it would no longer be bound to EU directives, EY explains.
While the UK remains 8th overall in the rankings, it is still the leader for offshore wind and comes in 2nd for marine, only being beaten by Ireland. The UK also ranks well for biomass, onshore wind and solar PV, ranking 5th, 11th and 13th respectively.
Ben Warren, power & utilities corporate finance leader at EY, said, “The frustration of the renewables sector stems from a fundamental inconsistency between the government’s rhetoric and its actions. Despite championing a market-driven energy sector, policy decisions are clearly picking winners and losers and ignoring signals from the market that onshore wind and solar PV can deliver affordable energy.”
He continued that the general election outcome provides the government with a “unique opportunity” to address the contradictory energy objectives and encourage clean energy investors.
“Investors will not put money on the table without some clear signals that the government intends to seize this opportunity,” Warren added.
Coming out as the top destination to invest in renewables is China, according to the report, followed by the US, Germany, India and Japan. Canada, France, Brazil and Australia also make the top ten.
Photo: Rob Faulkner via Flickr
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