Survey reveals majority of businesses lack confidence in renewable energy framework

British firms across the renewable energy sector have expressed major concerns over Contracts for Difference and other focal Government energy policies, according to a survey from the Renewable Energy Association (REA).


Out of 68 companies who responded to the REA’s survey, 51% thought that Contracts for Difference would not be effective in bringing forward new renewable power capacity. 

In addition, 69% believed that the lack of an emissions target in the Energy Bill sent a ‘poor’ or ‘very poor’ signal to investors while only 4% believed the UK had a ‘good’ or ‘excellent’ chance of meeting its 2020 renewable energy target.

However, the survey demonstrated some short-term optimism with 62% of companies expecting employment levels to stay the same over the next six to twelve months, and twice as many firms expecting to see employment increasing, compared to those expecting a decrease.

REA chief executive Gaynor Hartnell said the survey would be repeated every six months in order to build up a comprehensive picture showing trends in confidence levels.

According to Hartnell, renewables infrastructure requires billions of pounds of investment.

She said: “The UK has to achieve a higher growth rate than any other [EU] member state in order to reach its 2020 renewables target. Mixed messages remain a problem and industry needs policy certainty and political consistency. The prize is up to 400,000 jobs by 2020, economic growth and greatly improved energy security.”

The REA has also calculated an overall ‘renewables industry confidence index’ of 47% by combining the short term business outlook with confidence in meeting the 2020 target and in the regulatory framework.

The organisation claims that while an index score of 100% would constitute absolute certainty and a flourishing industry, a score of around 75% would indicate a healthy and confident industry likely to meet the 2020 renewable energy targets.

Independent generators are expected to deliver between a third and one half of necessary UK investment in the power sector to 2020.

Despite this, the REA claims there is widespread concern that, as currently conceived, Contracts for Difference are not investable for independent generators

There is also less confidence in the Renewables Obligation or Renewable Heat Incentive than in the small scale Feed-in Tariff, with 65% of respondents in the renewable heat and electricity sector demonstrating ‘poor’ or ‘very poor’ confidence in their sector’s regulatory framework.

Conor McGlone

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