There is a significant lack of faith within the renewable energy industry that the UK will meet its 2020 target, according to the Renewable Energy Association (REA).
An REA survey has indicated that only a handful of 68 senior managers questioned believe the UK has a ‘good’ or ‘excellent’ chance of meeting the target.
The UK currently gets 12% of its energy from renewable generators, according to DECC figures. The REA says the industry must grow by 16% every year to meet the 2020 target – a higher rate than any other EU member state.
Doubts in the renewables market have been attributed to scepticism over Government policies, including the long-running issue of the lack of a 2030 decarbonisation target in the Energy Bill before Parliament at the moment. MRW has reported that Lib Dem and Tory MPs have tabled amendments to the bill to lobby for the target.
Nearly three-quarters of respondents believe the lack of the 2030 target sends a ‘poor’ or ‘very poor’ signal to investors.
Around half felt the new Contracts for Difference policy, which will replace the Renewables Obligation (RO), will not be effective at encouraging investment in renewables. Steven Edrich, head of strategy at renewables company 2OC, said: “Continuing uncertainty over EMR [Energy Market Reform] and how the RO will be left to work beyond 2017 are crippling industry’s ability to look ahead and making it very difficult for banks to approve funding on projects now.”
Research from Ernst & Young and Bloomberg has suggested investment in renewables is decreasing.
Energy from waste sector concern
James Astor, managing director at anaerobic digestion (AD) and composting company Agrivert Biogas, said: “Recent Government actions mean that private equity and banks see Government renewable policy as a ‘risk’ that has to be priced.”
Charlotte Morton, chief executive of the Anaerobic Digestion and Biogas Association (ADBA), said when the Energy Bill was launched in November last year: “It is only through clear long term policy that the AD industry and other renewables can deliver their potential, which includes £2-3bn a year of green gas.”
The biomass sector is also concerned about the effect of Government policy. David Williams, chief executive at biomass company Eco2, said: “Investor confidence has deteriorated with the many changes in legislation seen in the UK over the last two years.”
Another industry insider said: “The biomass energy sector seems to be under continual attack from government officials. The proposed cap on biomass capacity under the Renewables Obligation to 2017 has certainly stopped two of the projects I was personally involved with, both of which had achieved planning consent.”
Policy certainty needed
REA chief executive Gaynor Hartnell said the survey would be repeated bi-annually to “gauge how policies are being received”.
“Mixed messages remain a problem and industry needs policy certainty and political consistency,” she said. “The prize is up to 400,000 jobs by 2020, economic growth and greatly improved energy security.”
However, the REA survey found there is some optimism in the renewables industry about employment levels, which are fairly stable.