Professional services firm Ernst & Young have released their latest Renewable Energy Country Attractiveness Index (RECAI), showing the UK’s position at an all-time low.
The RECAI, published regularly since 2003, rates each country’s attractiveness for investors in renewable energy firms based on various factors including economic stability, political stability, policy support for renewables, energy market access and technology potential (among other things).
The UK has regularly been high up on the index, remaining in the top ten for a while but, as of this latest release, has fallen down from 11th position to 13th over the course of the last two releases, reaching the lowest position it has held since the index was first published.
The report cited “the UK Government’s noncommittal, if not antagonistic, approach to energy policy” as the major factor for the drop in position.
The UK government’s successive reduction or removal of various kinds of support for renewable programs has been a subject of widespread criticism from environmental activists but also from less zealous sources including the UN.
EY’s report argues that the government’s current approach “continues to go against the grain of almost universal support for renewables”.
“Not only stalling project development and investment inflows,” it went on, “this is arguable jeopardizing UK energy security.”
This final point about energy security will be particularly damaging to the Department for Energy and Climate Change’s persistent defence of its energy policy. Energy secretary Amber Rudd, and various DECC spokespeople have regularly defended the cutting of subsidies to renewable programs by citing the need for immediate security of energy supply.
One of the latest flagship policies, the Capacity Market Auction, recently came under fire for arguably not providing value for money and for favouring fossil fuel generators over renewable sources.
EY’s energy corporate finance leader, and chief editor of the RECAI, Ben Warren, argued that the government’s current approach to renewables is “masking the UK’s advantages of a growing energy imperative” and that as such, when it comes to renewable energy, “the only way for the UK is down”.
Shadow energy secretary Lisa Nandy jumped on EY’s report, saying: “This damning analysis shows how the Tories’ ideological crusade against green energy is destroying jobs, damaging investment across the country, and making Britain’s power crunch worse. Conservative MPs are voting to block wind farms that enjoy local support and offer value for money, while defending generous hand outs to fund more expensive alternatives.”
EY’s report, however, was not entirely damning. In particular, it mentioned the potential for positive movement in wind energy, with pessimism only based on the current trajectory of government policy based on recent moves.
The Guardian newspaper spoke to the chief executive of Renewable UK, Hugh McNeal, who said: “The government has made it clear that the UK’s energy needs will be met by gas, nuclear and renewables, but not coal. While in office, the government will oversee a doubling of wind energy’s contribution to at least 20% of UK power needs by 2020. With onshore wind now the cheapest source of new power generation, and with our country by far the world’s biggest offshore wind market, we’re confident about growth in the UK market.”
And the DECC issued a statement saying that, while the situation for renewables in the UK is far from perfect at the moment, it is only so because of current policies favouring immediate cost-effectiveness, and that in the long term, a switch to a more generally low carbon energy portfolio is underway.
