Investments in renewable energy could be put on hold while European governments develop clear policies on shale gas, according to a biomass energy expert.
The prospect of increasing production of cheap shale gas in Europe has impacted investors’ forward planning, Chris Moore, CEO of MGT Power, a UK-based large-scale biomass developer, told a forest industry conference in London on Thursday.
Until clear policies emerge on whether countries will allow the exploitation of shale gas reserves, investments in biomass and other renewables might be put on hold, while investors whether better opportunities lie in shale gas than renewables.
“If anything, it’s going to cause a waiting period, and that’s bad for [renewable energy],” Moore told Pöyry’s Forest Industry: Challenges and Opportunities conference.
Currently, most shale gas operations are concentrated in the US, but deposits have been found in Europe and Asia, creating investment opportunities.
The UK government released a report in April backing shale gas extraction in the UK and is also planning to launch a new gas-fuelled power generation strategy this year.
“This is a clear signal to the market that we’re moving towards a higher [proportion of] gas generation”, which could put renewable energy under a lot of pressure, said Moore.
Investment firm F&C has said that shale gas is a “viable investment opportunity” in which UK pension funds will increasingly invest, predicting the industry will grow throughout Europe.
“You’re going to see a lot of question marks on renewables and their affordability,” said Moore.
However, he said “more expensive” renewable sectors, such as solar and wind, face a bigger challenge than biomass, should the shale gas industry expand significantly.