The growth of the UK renewables sector is slowing because investors fear the government may move to favour gas-fired generation, according to analysts at Ernst & Young.
The firm’s latest report on countries’ attractiveness to investors in renewable energy ranked the UK down one place to sixth. The government’s consideration of “natural gas a possible bridge fuel for the country for the foreseeable future” was cited as a reason for the slide. The government’s recent cut in the feed-in tariff for photovoltaics damaged investor confidence, said the report.
Globally, Ernst & Young found that renewable energy mergers and acquisitions in the first quarter of 2012 were up 41 per cent on the fourth quarter of 2011. However, it said rights issues were poor and new asset finance was “undermined by wavering political support and lack of project finance liquidity”.
The report said that in global power and utilities markets, one third of firms planned to divest this year. Few planned acquisitions.
This article first appeared in Utility Week’s print edition of 1 June 2012.
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