The UK has tumbled one place from fourth to fifth in the latest ranking on how attractive it is for renewable energy investment.
That’s a result of prolonged political uncertainty, “less-than-welcome” news that mature technologies need to compete for Contracts for Difference (CfD) scheme and a series of offshore wind project cancellations, according to EY’s latest Renewable Energy Country Attractiveness Index (RECAI).
Ben Warren, Partner at EY told ELN: “The reason for that is the UK Government is still pushing through the energy market reform and that entails a vast array of new support for renewables. I think what we’ve seen in the UK in the last few months in particular is energy really rising to the very top of the political agenda, which has driven some quite short term political point scoring which is really quite unnerving for the investment community.”
He believes policy consistency is what investors are looking for to invest in the renewable energy sector in the UK.
He added: “The UK is blessed with a very mature capital market and is a global financial centre and we have lots of capital providers with very deep pockets of capital looking for new areas to invest in and the renewable energy sector is attracting the interests of those investors, particularly pension funds and insurance funds. But all of those investors at the top of the wish list is some transparency around policy and some consistency around policy.”
The top three spots were taken by the US, China and Germany followed by Japan which jumped one place as a result of the “rapid solar market growth and a burgeoning offshore sector”.
He added: “Some of the markets we’re seeing some really good growth and some really transparent policy making and some South American economies continuing to drive investment. An emergence of solar PV across the globe where the cost reductions that we’ve realised in the last few years is really making solar PV almost a technology of choice because of its affordability.”
Markets to watch in 2014 include Ethiopia, Kenya, Indonesia, Malaysia and Uruguay, the report suggests. It also says that looking ahead, resilience, efficiency and effectiveness, technology beyond generation, new markets and innovative financing are the key trends for industry growth this year.