The recent cuts to renewables subsidies and green schemes, has dramatically affected the number of investors in the UK renewables market.
A worrying time to be losing investment as EU carbon targets loom in the distance and the government seems to be more focused on fracking than wind and solar energy.
EY energy corporate finance leader Ben Warren explains:
“Few in the renewables sector would disagree that falling costs mean many renewables projects, particularly onshore wind and solar PV, will be cost-competitive and subsidy-free within the next three to five years.”
Investors are currently trying to make sense of what seems to be policy-making in a vacuum, lacking any rationale or clear intent. Worryingly, this trend of inconsistent policy tinkering could also sour investor confidence in other areas, such as new nuclear, carbon capture and storage and shale gas, as well as offshore wind.”
With a series of wind farms both onshore and offshore being refused planning permission, the situation looks set to worsen. For those projects that have got the go ahead, there could be a situation where they struggle for investment and lending.
It not yet clear how investor confidence will be restored. Perhaps the new shadow energy secretary who is in favour of renewable energy may serve to promote investment and restore trust in the industry.
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