Looming Brexit prompts UK drop in renewables index, EY claims

Renewables investment has fallen due to the uncertainty surrounding Brexit.
Wind turbines stand on the EDF Blyth Offshore Demonstrator (BOD) wind farm, operated by EDF Energy Renewables Ltd., off the Northumberland coast in Blyth, U.K., on Friday, June 22, 2018. Electricite de France SA Chief Executive Officer Jean-Bernard Levy said it’s too risky to invest in large wind power projects without subsidies because swings in electricity prices would endanger returns for developers and their shareholders. Photographer: Matthew Lloyd/Bloomberg

The UK has dropped one place in the renewable energy attractiveness index due to Brexit, according to EY.

And Britain has also witnessed a 46% decline in investment in Q3 2018 as the uncertainty surrounding leaving the EU continues.

EY said many in the renewables sector are concerned that failure to secure a Brexit deal could lead to an increase in uncertainty for the power sector.

Ben Warren, EY global power and utilities corporate finance leader, said: “An uncertain world market has characterised the latest index, with some of the majors waiting to see how geopolitical fortunes play out – including Brexit and ongoing trade hostility.

“In China, this has been exacerbated by decreased demand and moves to slow renewables growth, which creates a surplus of low-price solar panels. But while leading markets are reluctant to make decisive moves in this climate, the inertia will likely be temporary as the renewable energy sector continues to mature.”

Mr Warren added: “An uncertain political climate – particularly the continuing trade disputes between the US and China among others – compounded by the increasing scarcity of subsidies, presents a challenging backdrop to the maturity of the renewables sector.

“However, oversupply will provide a short- to medium-term boost to the price competitiveness of renewables, while also likely to drive some consolidation upstream. In the longer-term, increasing demand for power from the mobility and heating sectors provides something other than trade disputes for policymakers to focus on.”