A survey conducted by advisory firm EY found that over half the active renewables investors surveyed said they wouldn’t be willing to plough more money into the sector until after the amended Energy Bill becomes law next year.
The lenders said this is largely due to the current political and regulatory risk following the government’s decision to close the Renewables Obligation (RO) support scheme in 2016 rather than 2017, a year earlier than planned.
EY assistant director Matthew Yard said that the government’s actions have already made securing project finance “more complex, more expensive and increasingly difficult since the announcement of the early closure of the RO”.
“Those banks that have indicated they are considering lending to UK onshore wind RO projects are now seeking better terms and some form of mitigation against a situation with no RO revenue,” he added.
The survey was carried out on behalf of trade body Scottish Renewables which warned that the industry’s suspicions of an impending investment hiatus have been proven correct.
“With the decision to end support a year earlier than planned, around two gigawatts of onshore wind projects in Scotland have been put at risk. These are projects that could bring around £3 billion pounds of investment and provide enough generation to meet the equivalent electricity demand of 1.2 million Scottish homes,” said Scottish Renewables senior policy manager Michael Rieley.
“If we are to avoid losing the benefits of this scale of development in Scotland, the UK government must allow those developers that have already made significant progress with their projects to continue them as part of the RO scheme,” Rieley added.