Fears the UK will use gas-fired power stations to deal with its looming energy crisis rather than turn to renewable sources have seen the country drop out of the top five most attractive countries for clean energy investment.
The UK dropped to sixth out of 40 countries in Ernst & Young’s quarterly report, published today, falling back below Italy after a strong performance in offshore wind energy had raised its position earlier in the year.
The new emissions performance standard for power plants unveiled in last week’s draft Energy Bill sparked fears of a new dash for gas if it is used as a bridge fuel while coal-fired stations are phased out.
The cuts to solar feed-in tariff subsidies coming into force in August also had a negative impact, although this was exacerbated by a reweighting of the indices towards solar, which affects the UK disproportionately given its primary strength is in wind power.
However, despite the downgrade, Ben Warren, Ernst & Young’s energy and environmental finance leader, said plans for a significant spending programme to improve the country’s transmission infrastructure for renewable energy sources struck a more positive note – although details still had to be worked out.
“There is significant concern across the green energy sector that the government will shift its focus towards natural gas as an alternative to renewables,” he said. “The Electricity Market Reform needs to deliver the right framework to stimulate investment across all forms of energy generation, including renewables.
“The recently published draft Energy Bill is a welcome step in the right direction and signals clear progress; however, it is important we clarify certain aspects of the new regime, particularly around the off-take arrangements for independent generators in order to avoid uncertainty for investors.”