Offshore wind is UK’s best hope for future investment, says EY report

The UK is back in the top ten of EY’s Renewable energy country attractiveness index (Recai), having climbed four places since October 2016.

The latest index shows that the UK has halted its downward trend, having slipped to an all-time low of 14th place, following uncertainty over Brexit and a Whitehall reshuffle, which saw the Department of Energy and Climate Change become part of a larger ministry, the Department for Business, Energy and Industrial Strategy.

But the report says despite this positive improvement, the future of the UK’s investment environment remains uncertain due to a lack of clarity around targets and subsidies.

“Investors are still waiting for clarity around the post-Brexit landscape. Question marks linger around renewable energy targets, subsidies and connections with mainland power markets,” said Ben Warren, EY’s head of energy corporate finance.

“The CfD funding allocation is relatively modest and there is continued uncertainty around the outcome of the mechanism. In the absence of a buoyant CfD regime, it’s difficult to see how the UK can force its way back among the front runners for renewable energy investment,” he added.

The Recai report predicts that offshore wind will be the clear winner in this round of CfDs and represents the UK’s best hope for future investment.

“The offshore wind sector is showing signs of creating a sustainable industry and driving down costs to provide more value for money for UK plc,” said Kent.

The latest report also saw the US drop from the number one slot, following policy changes by the Trump administration, and Kazakhstan, Panama and the Dominican Republic entered the index for the first time.

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