UK Government urged to address policy uncertainty over renewables and energy storage

Is the UK an attractive destination for renewable energy investment?

EY’s latest quarterly renewable energy attractiveness index puts the UK in eighth place out of 40 countries, with China, the US and Germany once again taking the top three positions. It also highlights some of the investment opportunities available as the UK works towards its climate change goals.

The professional services firm argues that the attractiveness of the UK’s renewables sector is currently marred by conflicting messages around its role in the country’s future energy mix.

Ben Warren, power and utilities corporate finance leader at EY, points to a “fundamental inconsistency” between what the government says and what it does. “Despite championing a market-driven energy sector, policy decisions are clearly picking winners and losers and ignoring signals from the market that onshore wind and solar PV can deliver affordable energy,” he says.

Warren believes that the UK’s post-election political stability provides an opportunity for the government to reconcile its contradictory energy objectives. “Investors will not put money on the table without some clear signals that the government intends to seize this opportunity,” he warns.

The report also illustrates the potential of grid energy storage, and suggests that it’s time to focus on developing a clearer view of the investment opportunity, the business models and the most suitable markets.

Warren comments: “With a number of storage technologies already proven and costs falling fast, we must stop thinking about storage as something that will arrive tomorrow. It arrived yesterday and the game is already changing. It’s time to start viewing storage as just another energy asset that generates long-term predictable revenues and needs competitive and appropriate construction capital solutions.”