EY’s quarterly Renewable Energy Country Attractiveness Index (RECAI) found that the Government’s renewable energy subsidy cuts were already having a tangible impact on renewable investment.

It marks the first occasion in 45 issues of the RECAI that the UK has fallen out of the top-ten.

This year alone, 23 large-scale projects representing around 2.7GW of energy have been publicly abandoned, putting a question mark over the long-term future for the UK’s renewable sector.

The report also questions the Government’s opposition to the cheapest renewable technology – onshore wind – in light of its support for the more expensive and less popular nuclear and fracking options.


EY energy corporate finance leader Ben Warren said: “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.

“However, by prematurely withdrawing support, the Government risks stalling or killing projects that would otherwise maintain the momentum to get the market to that critical point.

“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 (CCS) and shale gas, as well as offshore wind.”


The findings back up a separate report from EY, published earlier this week, which found that the major sources of finance for onshore wind projects were refusing to lend money until the policy landcape was more certain.

“The UK renewables sector is at a crossroads,” added Warren. “It can continue to fight this policy tinkering, or see this as an opportunity to throw off the shackles of policy dependency and establish itself at the forefront of unsubsidised renewables in Europe. The latter won’t be easy, but it may well be worth taking the risk.” 

The report was not completely without optimism for the UK however, as it ranked as the most attractive market for offshore investment and second for wave and tidal.


Responding to the EY report, industry trade group RenewableUK warned that the Government was preventing the industry from delivering cheap low-carbon energy for consumers.

RenewableUK deputy chief executive Maf Smith said: Investors are saying that Government has not set out a clear energy policy and don’t see the UK delivering decarbonisation at lowest cost, based on actions taken so far.

“The biggest worry for investors is that of an investment hiatus. Industry is ahead of Government in the need to protect the consumer while keeping the lights on and tackling climate change.

“Onshore wind is already the lowest-cost low carbon option and offshore wind is ahead of target in its cost reduction efforts. But without long term clarity, projects will be delayed, investment will go elsewhere and consumer savings will be lost.”

Around the world

Major policy changes and climate pledges around the world led to several moves in the index, with the US replacing China at the number one spot.

EY said that President Barack Obama’s Clean Power Plan (CPP) sent a strong message of accountability at the state-level for the shift to a low-carbon economy and should galvanize a significant increase in renewable energy investment over the next 15 years.

EY’s Warren added: “The CPP is the most comprehensive, far-reaching and flexible emissions legislation in the US to date and gives a clear steer on the country’s long-term energy strategy.

“Targets alone will not construct new projects, but long-term visibility increases investor confidence that demand is there, and maintains momentum as we hurtle towards universal grid parity for renewables.”

India’s economic, political and energy market reforms, as well as ongoing significant foreign investment, moved the country into third position ahead of Germany despite the European nation’s ongoing commitment to a 100% renewable energy system. 

Brad Allen

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