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United Kingdom

UK renewables investment approaching 'cliff edge'

UK: Spending on renewable energy projects has declined by £1.1 billion in the past six months and is expected to continue falling, according to a UK think tank.

Investment in UK renewable projects is facing a cliff edge, the report warns
Investment in UK renewable projects is facing a cliff edge, the report warns

The Green Alliance think tank published a briefing showing a fall in renewable energy investment.

The group's analysis, based on the two latest publications of the government's infrastructure pipeline, showed the proportion of low-carbon infrastructure fell from 71% in 2012 to 46% in 2016.

Green Alliance also predicted this will continue, with a 95% fall in renewable energy investments between 2017 and 2020 if plans do not change.

This "cliff edge" is so severe that, unless renewables uptake increases, the UK may not be able to meet its carbon budgets and Paris Agreement pledge, the briefing warned.

It showed that, although the private sector is moving away from high-carbon assets such as airports, uptake for low-carbon projects is falling. Meanwhile, the public sector's high-carbon asset growth has been increasing, albeit slowly.

Green Alliance acting deputy director Dustin Benton said: "The private sector is exiting high carbon infrastructure. That is being matched by the high-carbon investment up until this year. But that is going to run up to a real problem after 2017. That is down to the fact that government has delayed decisions."

Green Alliance said there are gaps in the energy, heat and transport markets that can be bridged.

But it also stressed, without effective policies in place to improve efficiency standards in construction and housing, the balance could tilt in favour of high-carbon investment.

To address the problem, the organisation suggested ideas such as using London's 147 million square metres of rooftops for an urban solar projects capable of generating 23% of the city's power and approving the 4.8GW Dogger Bank offshore wind project.

What is less clear is a remedy to the UK's heating infrastructure , which is a long way from being fully decarbonised.

Legacy costs of more than 80% have in some ways stifled the Department for Business, Energy and Industrial Strategy (BEIS), which is trying to cut costs and free up its budget, the briefing stated.

The defunct Department for Energy and Climate Change's (Decc) own levy control framework had previously failed to cap renewable energy spending.

Globally, the UK is not seen as an appealing place for investment in renewables. In October, it fell to an all-time low in EY's renewable energy country attractiveness index.

Although big decisions have been made, such as the approval of the world's largest offshore wind site, Dong Energy's 1.8GW Hornsea Project 2, major political factors have lowered the country's prospects.

These include uncertainty around Brexit, the closure of Decc and the approval of the Hinkley Point C nuclear project, all of which "dealt a sizeable blow to the UK renewable sector", according to the briefing.

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