According to the RECAI, The UK has climbed back into the top 10 most attractive countries for renewable energy investment but the outlook for the industry remains cloudy amid a lingering lack of clarity around targets and subsidies.
The RECAI says that the UK investment environment is more settled than recent years, which were beset by subsidy cuts, but the future post-Brexit remains uncertain. While the UK is behind schedule to meet its 2020 EU renewables target, coal-fired power has declined significantly and even reached zero for a day on 21 April.
The RECAI states that in April the UK kicked off the second round of renewable energy auctions for Contracts for Difference (CfD) subsidies. The Government plans to allocate £730m of annual funding over three rounds, including £290m in the current round.
Emerging offshore wind sector offers hope for future
This round of CfD auctions is open to “less established” technologies such as offshore wind, wave, tidal stream, geothermal and biomass with combined heat and power. Falling costs and advances in technology in the offshore wind industry now represent the UK’s best hopes for future investment, according to the RECAI.
US drops to third place
The RECAI also saw China and India surpass the US, which fell to third in the index following a marked shift in US policy under the new administration.
The report identifies the US Government’s executive orders to rollback many of the past administration’s climate change policies, revive the US coal industry and review the US Clean Power Plan as key downward pressures on renewable investment attractiveness.
In China, the National Energy Administration (NEA) announced in January 2017 that it will spend US$363b developing renewable power capacity by 2020. This investment will see renewables account for half of all new generating capacity and create 13 million jobs, according to the NEA plan.
India continued its upward trend in the index to second position with the Government’s program to build 175GW in renewable energy generation by 2022 and to have renewable energy account for 40% of installed capacity by 2040. The country has added more than 10GW of solar capacity in the last three years – starting from a low base of 2.6GW in 2014.
Economically viable renewable energy alternatives coupled with security of supply concerns are encouraging more countries to support a clean energy future. Kazakhstan (37), Panama (38) and the Dominican Republic (39) have all entered the index for the first time, according to the RECAI.