Will 2016 be “annus horribilis” for UK Sustainable Energy Sector?

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Ahead of the new much reduced Feed-In Tariff (FiT) rates for small scale solar, wind and hydro power coming into effect next week, Ashden is publishing an alarming new report detailing how businesses, communities and employers are already being affected.

After at least 14 changes to the sustainable energy policy landscape in the UK in the last six months of 2015, key players in the sector are anticipating an “annus horribilis” ahead, predicting a loss of sales, jobs and economic security.

In a survey of Ashden Award winners past and present – representing a combined workforce of more than 4,000 people and annual turnover of almost £80 million – the majority reported that they are preparing for loss of growth and investment this year.

More than half reported that they had either already lost or expected to lose sales as a result of the policy changes. Nearly 50% stated that there have been or will be redundancies within their organisation, and one in two said that they are reviewing their business model, including moving away from electricity generation and looking to Europe for business.

According to the environmentalist and writer Jonathon Porritt “If anyone knows what’s really going on in the UK’s sustainable energy sector, it’s the winners of Ashden Awards over the last 15 years. The negative impact of the Government’s policy changes over the last nine months is already being felt, and the pain is clearly going to get a great deal worse.

“This makes no sense whatsoever. As the rest of the world moves forward on the Paris Agreement, the UK is heading rapidly in the opposite direction – with potentially disastrous consequences for the sector, for jobs, and for the UK’s entire energy strategy.”

Cutting Feed-in Tariff generation rates, whilst encouraging the ‘dash for gas’ and new nuclear projects, has left the renewable energy industry unclear on the way forward and fostered uncertainty among investors.

One organisation surveyed said: “You think you are travelling in a certain direction having spent years laying down the ground work in the industry and then overnight these rails are ripped up.”

According to Ashden’s UK programme manager Simon Brammer: “Even before all of the policy changes come fully into effect, the UK is off track to meet its own national target and EU commitment to generate 15% of its energy from renewable energy by 2020.

“What’s needed is a clear, long term timetable for UK energy policy in order to reignite confidence and investment in the clean energy sector. The next five years cannot be characterised by the uncertainty and sudden U-turns and curve balls that we saw in 2015.”

With the survey findings Ashden has produced a report – FiT for the 21st century? A survey of the impact of recent UK policy changes on the sustainable energy sector – examining the impact of the raft of policy changes on some of the leading sustainable energy practitioners and entrepreneurs in the UK. They represent a broad spectrum, from small start-ups to multi-million pound businesses, all working to accelerate the transition to a low carbon economy.

FiT for the 21st century? includes a series of their recommendations for government for 2016, from introducing new policies and strengthening existing ones on home energy efficiency to learning from the low cost finance model pioneered by the government-owned German bank KfW.