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Ambivalence in government support for renewables is making gas more attractive to potential investors according to a report by leading consultancy PA Consulting.
PA’s “Energy Investment Map” compared prospective returns and risks of energy technologies in 31 countries worldwide. Its findings form the basis of an improving case for investment in gas
Mark Livingstone, energy analyst, said: “The results from PA’s map indicate that gas could be the one to watch over the coming years.”
The map showed that renewables remain attractive as investments. But it said that renewables were being compromised as investment prospects by industrial consumer pressure in the UK to freeze the carbon price support and the need for EU approval under state aid regulations.
The UK ranked sixth in the map’s renewable energy index and tenth in its conventional energy index which is two places higher than last year.
Livingstone said the completion of the Energy Act will “give investors a greater level of clarity and certainty.” But there remained, he said, a “big question” around what investors should back.
“Prospects for gas-fired generation remain uncertain in the short term until support levels in the capacity market are made clearer. Economics for gas are also expected to improve once coal-fired generation reduces and existing nuclear plants reach the end of their life,” he added.
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