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The emergence of subsidy-free solar has helped the UK climb three places in a global ranking of the most attractive destinations for renewable investment.
The country now stands in seventh out of 40 in EY’s biannual ‘Renewable Energy Country Attractiveness Index’ (RECAI). The UK jumped four places to tenth in the previous index in September, after slipping to an all-time low of 14th in September 2016.
The rise comes despite a slump in renewable investment in 2017 due to the closure of the Renewables Obligation to new projects. Onshore wind installations reached a record high last year as developers scrambled to complete projects in time to secure subsidies through the scheme.
“Following a large drop in renewables investment in 2017, the UK is bouncing back, with subsidy-free solar PV and onshore wind projects for merchant generation as well as repowering of old wind farms,” the report states.
China topped the rankings for the third time in row. The US and Germany rose to second and third respectively, overtaking India, which dropped down to fourth. Australia and France were non-both non-movers in fifth and sixth.
EY Global Power and Utilities corporate finance leader and RECAI chief editor, Ben Warren, said: “Rising interest rates are likely to increase the cost of cheap capital that has underwritten the dramatic roll-out of renewable energy capacity over recent years.
“Government subsidies for clean power are being reduced around the world and financiers are anticipating tougher times ahead for project developers. However, movements in the index suggest that these developments are just headwinds as the renewable energy sector continues to mature and markets expand.”
He continued: “While the current economic climate has driven a relentless focus on costs, that focus is paying dividends with the global cost of electricity from renewable sources falling year-on-year. Combined with the plunging cost of battery technology, we anticipate further rapid growth of the evolving renewable energy sector in the coming years.”
Source: RECAI, EY
In September, Anesco opened the UK’s first subsidy-free solar farm near Flitwick in Bedfordshire. A few months later Hive Energy and Wirsol Energy revealed plans to build a much larger 350MW solar farm near Faversham in Kent without any subsidies.
Recent analysis by Aurora Energy Research concluded the UK is on the cusp of a £20 billion subsidy-free renewables “revolution”, which could create up to 18GW of new capacity by the end of the next decade.
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