United Kingdom

United Kingdom

Industry laments lack of policy certainty

UK: The UK wind industry has reacted with dismay to a new government gas strategy, and seeks greater certainty regarding renewable energy policy to restore confidence in the sector.

In December, chancellor George Osborne announced measures in the so-called autumn statement - which spells out investment priorities for the next year - to stimulate investment in up to 37GW of gas capacity.

Maria McCaffery, chief executive of industry body RenewableUK, expressed concern that neither the statement nor energy legislation unveiled in November has provided any guarantee of a long-term market for renewable investment.

"The energy bill has laid out a good framework, but there's still a lack of clarity beyond the next five years," she said.

The government has delayed setting a decarbonisation target until after the next election in 2016, and the decisions on gas depend on the country's fourth Carbon Budget, to be decided in 2014.

"There's still going to be a lot of movement over the next few years, so the government has its work cut out convincing world-leading companies it remains committed to low carbon generation," said McCaffery.

The government's strategy is contrary to the findings of a study by consultancy Cambridge Econometrics, commissioned by environmental campaigners WWF-UK and Greenpeace. This projected that UK GDP in 2030 would rise by 0.8% - £20 billion - in a high wind energy scenario compared to a high gas scenario, with 70,000 more full-time equivalent jobs created and savings of £8 billion a year on gas imports.

However, contrary to industry claims that investment is suffering because the government has yet to clarify its wind policy, new figures reveal that 2012 has been the most successful year for obtaining long-term debt finance in the UK onshore wind sector since the financial crisis began in 2007/08.

Project finance specialists at audit and advisory firm Mazars have carried out research that reveals more deals in excess of £15 million closed between January and the end of October in 2012 than any year since the onset of the credit crunch, with a total value in excess of £500 million.

Well-planned projects and positive macro-economic trends have enabled many to succeed, despite tighter credit conditions for onshore projects, the firm claimed.

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