UK renewable electricity on track, while renewable heat lags: REA report

The UK is on track to meet the government’s target of 30% renewable electricity by 2020 following average annual increases of 20.3% per year since 2009, according to new analysis from the Renewable Energy Association.

But the REA analysis shows that the growth in the renewable sector so far has been due to contributions from wind, biomass, solar power and energy from waste, while renewable heat generation has failed to keep pace.

The report shows that although renewable heat has “grown steadily” at an average of 11.3% per year from 2009 to 2013, the rate of deployment will need to increase to an average of 18% per year between 2013 to 2020 to reach the government target of 12% renewable heat by the end of the next decade.

PwC, a co-contributor to the report, estimates that just £1.4 billion was invested in renewable heat up until 2012, compared to the £27.7 billion invested in renewable electricity from 2010 to 2013.

“Our analysis highlights the mixed fortunes for investors in different forms of renewable energy,” said PwC’s head of renewable energy Ronan O’Regan.

“With recent historical investment dominated by renewable electricity, investment in renewable heat has been modest in comparison and this market requires a rapid scale up in investment levels if we are to achieve our overall 2020 renewable energy targets,” he added.

To achieve the ambitious government targets renewable heat must attract investment of £23.6 billion over the rest of the decade while renewable electricity is expected to see £40.8 billion is invested between 2014 and 2020, PwC data shows.

But the government’s Renewable Heat Incentive may have already begun “to spur positive growth in green heating” said REA chief executive Nina Skorupska in a statement accompanying the report.

“This report highlights the close relationship between clear, stable policies and sustained growth and jobs in the renewable energy industry.

“Drastic Feed-in Tariff cuts in 2011/12 led to widespread job losses in the solar industry, and the continued policy uncertainty for renewable transport has seen employment and investment opportunities in UK refineries go begging,” she said.

Analysis undertaken by Innovas for the same report found that 103,000 people were employed across the UK renewable energy value chain in 2012/13, with a peak of 110,000 jobs in the sector in 2010/2011. The decline was mainly due to job losses of around 10,000 in the small scale solar industry which were partially offset by continued job creation of around 4,000 in the wind industry, Innovas said.

Skorupska urged Government to learn from the policy mistakes of the past and engage closely with industry to resolve outstanding uncertainties.

“Clear, stable policies create the investment, jobs and growth in renewables that the UK needs,” Skorupska said.