Subsidy-free solar powers UK’s renewable energy attractiveness
1st May 2018 | Commercial Energy
Despite a large drop in renewable energy investment in 2017, the UK has climbed three places in a ranking of the world’s most attractive renewable energy markets for investors, thanks to a move towards subsidy-free solar PV.
The UK has been ranked seventh in the latest bi-annual Renewable Energy Country Attractiveness Index (RECAI) from consultancy EY, up from 10th in the last index, to a position they last held in 2014. EY reports that the UK investment environment had settled in recent months as the market adapted following a plethora of cuts to subsidies and feed-in-tariffs (FiTs) combined with the closure of Renewables Obligation (RO) applications last year.
“Government subsidies for clean power are being reduced around the world and financiers are anticipating tougher times ahead for project developers,” EY’s global power and utilities corporate finance leader Ben Warren said.
“However, movements in the Index suggest that these developments are just headwinds as the renewable energy sector continues to mature and markets expand.”
The rise has been partly attributed to the success of the country’s first subsidy-free solar farm in Bedfordshire and is compounded by growing onshore wind projects and moves to repower old wind farms, according to EY. Opened in September 2017, the 10MW farm in Clayhill, Bedfordshire, is co-located with a 6MW battery storage facility and was developed after the RO subsidy scheme closed to new applicants. The solar farm is expected to deliver enough electricity to power around 2,500 homes and save 4,452 tonnes of carbon.
Research suggests that Britain is on course for a subsidy-free renewables “revolution” that could add 18GW of new capacity by 2030 and attract £20bn of investment. The centrepiece of the UK’s renewables investment plan is the offshore wind sector, which plans to invest £17.5bn in the UK up to 20201, after generating a record low strike-price of £57.50 per MWh in the latest Contract for Difference (CfD) auction.
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