Government backing for offshore wind keeps UK’s renewable energy attractiveness afloat
15th May 2019 | Commercial Energy
The UK has maintained its top-ten position in a ranking of the world’s most attractive renewable energy markets for investors, largely due to the Government’s recent assertation that offshore wind power will provide a third of the nation’s electricity by 2030. Published today (15 May), the latest edition of consultancy EY’s bi-annual Renewable Energy Country Attractiveness Index (RECAI) ranks 40 countries on how attractive their renewable energy investment and deployment opportunities are to investors of all sizes across the globe.
The UK has maintained its previous (November 2018) position at eighth in the ranking, with EY citing the Government’s recently unveiled Offshore Wind Sector Deal as a key move for supporting long-term investments. Published in March by the Department for Business, Energy and Industrial Strategy (BEIS), the policy framework saw key industry players agree to collectively invest £250m over the next 11 years in exchange for participation in £557m of state subsidies. It additionally commits the offshore wind sector to boost annual exports fivefold by 2030, to reach £2.6bn.
While critics such as Greenpeace have argued that the Sector Deal is not ambitious enough to help deliver a net-zero carbon power sector by 2050, EY’s research has found that it has given investors more long-term certainty – particularly in light of the Government’s decision to lock onshore wind out of the Contracts for Different (CfD) framework in 2015, which has slowed investment in onshore projects. Indeed, RenewableUK estimates that just 598MW of onshore wind capacity was installed across the UK during 2018, down from 2.7GW in 2017.
EY also believes that the publication of the Offshore Wind Sector Deal helped to b “buoy” the UK’s position in the RECAI table, amid uncertainties cause by Brexit and compounded in the hydropower sector by the Government’s decision not to back Swansea’s pioneering tidal lagoon. It did so by claiming that it would cost at least £31.5bn less to provide the same level of generation through offshore wind.
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