United Kingdom

United Kingdom

Policy changes drops UK out of attractiveness index top 10

UK: Analyst firm Ernst and Young (EY) said recent policy changes have "sentenced the UK renewables sector to death" as it releases its quarterly attractiveness index.

The UK fell three places to 11th in EY's attractiveness rankings
The UK fell three places to 11th in EY's attractiveness rankings

The UK has fallen out of EY's renewable energy country attractiveness index (RECAI) top 10 for the first time in its history following months of anti-renewable policy announcements by the new government.

The UK fell from eighth to eleventh in the rankings behind Brazil, Chile and the Netherlands.

"A barrage of severe and, in some cases, totally unexpected policy revisions impacting most segments of the UK's renewables industry has prompted an equally dramatic three-place fall in the index to 11th position," EY said in the report.

In June, the new Conservative-majority government announced plans to close the Renewables Obligation (RO) support scheme a year earlier than planned in April 2016.

Ernst and Young said the decision suggested the government had "sentenced the UK renewables sector to death by a thousand cuts".


Previous ranking

1 (2) US
2 (1) China
3 (4) India
4 (3) Germany
5 (5) Japan
6 (6) Canada
7 (7) France
8 (9) Brazil
9 (11) Chile
10 (12) Netherlands

Other changes to the country's support for solar, the feed-in tariff for small scale renewable energy projects and alterations to the climate change levy also contributed to the UK's fall.

The report noted energy minster Amber Rudd's "cryptic messages" in a parliamentary committee session in July over whether onshore wind projects would be eligible for any future Contracts for Difference (CfD) auctions — if one takes place. The CfD subsidy is a replacement programme for the RO.

Elsewhere in the RECAI rankings, the US replaced China for top spot as a result of President Obama's clean power plan. India leapfrogged Germany into third as the European country moves towards an auction-based support system.

RECAI ranks 40 countries on the attractiveness of investing in renewable energy projects. You can read EY's full RECAI report here.

The report echoes EY's recent findings in a questionnaire conducted with project lenders, commissioned by trade body Scottish Renewables.

It concluded financing for onshore projects in the UK had become "more complex" and that "fewer banks were willing to lend to UK onshore RO projects".

While hugely disappointed at the UK dropping out of the top 10 for the first time RenewableUK chief executive Maria McCaffery was not surprised: "We have emphasised repeatedly that singling out one renewable energy technology would have ripple effects on other renewable energy technologies.

"The government just did not understand, and here we are the first ever time since Ernst and Young started that index [12 years ago] we are not in the top ten," she added.

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