The UK has become more attractive to renewable energy investors following the government’s decision to lift its block on financial support for onshore wind and solar projects.
Britain has climbed the rankings of a biannual global survey of investors to take the sixth spot in EY’s “attractiveness index” for renewable energy ahead of a major clean energy auction next year.
The auditing giant said the government’s decision to include onshore wind and solar energy projects in the auction had helped the UK climb one rung on the rankings list, to just below Germany, Australia, France, China and the US.
The US topped the rankings for the first time since 2016 – in spite of the federal government’s ongoing support for fossil fuels – in large part due to plans to invest $57bn (GBP47bn) to install up to 30GW of offshore wind by 2030.
China has fallen from the top of the rankings to second place as Beijing looks to wean the market off subsidies, and the coronavirus pandemic cut its growing appetite for energy.
“Certainly, renewable energy is not immune to the economic disruption being wrought,” said Ben Warren, the author of EY’s report. “But many of these effects are likely to be short-term. Already, manufacturers in China and Europe are restarting production. Utilities have worked hard to keep generation going in difficult circumstances. And power demand will rebound as economies get back to work.”
He said investors remain confident in “the long-term picture for clean energy”.
“The need, after the pandemic, to ensure greater economic and social resilience will work in favour of distributed power sources, such as wind and solar, and the applications offered by battery storage,” he said.
The UK’s decision to remove a block against onshore wind projects earlier this year followed a government pledge to cut emissions to virtually zero by 2050 – a feat that its official climate advisers believe will require a tripling of the UK’s onshore wind-power capacity in the next 15 years.
Renewable energy developers are working towards the 2021 auction, despite the uncertainty created by the coronavirus pandemic, to help spur a green economic recovery once lockdown measures are lifted.
Luke Clark, of RenewableUK, said EY’s report is right to highlight the economic opportunity offered by renewables after the pandemic.
“Our sector’s plans to invest tens of billions of pounds in vital new energy infrastructure all over the country have not changed, and the government is supporting our work as it remains committed to reaching its legally-binding target of net zero emissions,” he said.
“The UK’s low-carbon economy will stimulate new growth, boost productivity and support tens of thousands of jobs as we work on projects at home and secure new export opportunities around the world.”