The UK has fallen down EY’s biannual ranking of the attractiveness of renewable energy investment markets by three places to seventh.
The 62nd edition of the EY Renewable Energy Country Attractiveness Index (RECAI) shows that the UK has also vacated the top spot for offshore wind attractiveness, following the UK government’s CfD auction round attracting no successful bids in the space earlier this year.
The last time the country was as low as seventh in the overall rankings was in 2019 with the country dropping below the US, Germany, China, France, Australia and India. The UK peaked on the charts at third in May last year.
Ben Warren, EY Renewables Corporate Finance and RECAI Chief Editor, comments: “The UK’s recent challenges in the offshore wind sector echo a broader, global struggle.
“When auctioning contracts for offshore wind generation, governments need to reflect economic conditions in the design of the auction.
“Considering moving away from cost-only auction formats and incorporating non-price factors, such as environmental considerations and job creation, may entice developer interest and a rise in bids.”
This comes as the Aberdeen and Grampian Chamber of Commerce (AGCC) has called for a new body independent of government to be set up to oversee UK energy security and the transition to net zero.
The chamber said that the energy industry is being used as a “political football” in its 38th Energy Transition Survey, published on Tuesday.
However, the AGCC survey found optimism is increasing about the Aberdeen region becoming a globally recognised renewable energy hub.
As of October, 22% of respondents were “Extremely/very optimistic” about Aberdeen’s chances, while 59% were “Moderately/slightly optimistic.”
In addition to this, 66% of respondents agreed that energy transition credentials are critical to long-term success, however, this is down compared to April’s findings when 71% of businesses said that this was necessary.
Mr Warren added: “For the UK’s overall attractiveness as a renewables destination, there must also be a concerted effort to speed up the grid connection process.
“Current years-long waiting times are delaying the pace at which projects can begin generating power and revenue.
“Ultimately developers need to feel that prospective projects will offer a viable, timely return on investment if they’re to contribute capital to the UK’s clean energy infrastructure.”
The most attractive countries for renewable energy investment
Looking at the top spots on the table, the first three countries have remained unchanged, according to the latest findings in the RECAI.
The US, Germany and China remain at the top with the former seeing growth in its solar sector as a result of the incentives provided by the Inflation Reduction Act.
Germany remains in second position, having experienced “substantial growth” in its onshore wind sector; new capacities installed by the end of September surpass the total installed in 2022, says EY.
As for China, which finds itself remaining third for renewable energy investment attractiveness, the country was found to be continuing its upward trajectory in the offshore wind market despite halting national-level subsidies.
Recommended for you
