The UK has fallen out of the top ten in Ernst and Young’s Renewable energy country attractiveness index (RECAI) for the first time since the index was launched 12 years ago.
In its quarterly report published on Wednesday, EY said a wave of policy announcements has “sentenced the UK renewables sector to death by a thousand cuts”.
In July, energy secretary Amber Rudd announced plans to cut subsidies for the renewable industry to reduce emissions in a more cost-effective way.
Ms Rudd had said: “Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies.”
Although EY acknowledges that onshore wind and solar PV will likely be cost-competitive and subsidy-free within the next three to five years, withdrawing support prematurely could risk “stalling or killing projects that would otherwise maintain the momentum to get the market to that critical point”.
The report also cites the lack of a grace period for mid-scale solar projects impacted by the RO termination and proposed amendments to the FIT regime as reasons for the UK moving down in the index.
Key index movements
RECAI chief editor Ben Warren commented: “In today’s world, where the majority of the population is facing some form of energy crisis, public support for low-carbon energy solutions and the increasingly compelling economics, flexibility and scalability of renewables cannot be ignored.
“Policymakers must recognise the strategic imperative of a diverse energy mix to help address economic and societal goals, as well as environmental ones.”
A DECC spokesperson said: “Government support has driven down the cost of renewable energy significantly, making it more cost effective for investors. However, we are taking urgent action to get a grip of renewables spending in order to protect hard working families and businesses and keep their bills as low as possible.
“The UK still remains an attractive location for investment in energy and we have continued to be the global leader in offshore wind investment. Subsidies funded via bill-payers have contributed to renewables making a record contribution to our electricity generation in Q1 this year and have nearly trebled our renewable electricity capacity in the last parliament alone.”
The UK was sat in 8th place when the last rankings were published in June but has now dropped to 11th.