The UK risks falling behind in the race to become a global renewable energy leader without rule changes, two of the country’s energy trade bodies have warned.
Renewable UK and Energy UK have both separately called on the Government to make the country a more attractive place for investors looking to build wind and solar farms.
“The renewable energy sector is facing a perfect storm this year, with inflation squeezing out already tight profit margins, and fierce international competition for investment, skills and supply chains,” said Renewable UK policy boss Ana Musa.
“The US and the EU are in a race to offer incentives to clean energy investors, and the UK cannot take its leadership position for granted.”
Ahead of the Chancellor’s budget next month, Renewable UK said that the Government must put in place “its share” of fiscal incentives for both developers and companies in the supply chain in order to compete globally.
Without changes, there is a risk that companies will not bid as much as the Government wants in the next auction for solar and wind farms this summer, Renewable UK said.
Energy UK, which also represents non-Renewable energy companies, said that the UK could miss out on £62 billion in investment before the end of the decade.
It said the current windfall taxes on energy companies are “poorly designed” and favour oil and gas producers.
Both also said that recent problems have pushed up costs for developers.
Energy UK’s chief executive Emma Pinchbeck said: “The UK is in increasing danger of undermining its own ambitions and failing to deliver on its commitments.
“In many ways, the UK has led the way in the transition to clean energy – witness our world leading offshore wind industry – but we risk squandering this position and driving the investment that we need elsewhere.”
A Government spokesperson said: “The Government has consistently attracted investment in renewables.
“Since 2010, the UK has seen more than a 500% increase in the amount of renewable electricity capacity connected to the grid while through Contracts for Difference we have awarded contracts totalling almost 27GW of new low carbon capacity to date.
“We are consulting on reforms as part of the Review of Electricity Market Arrangements, including changes to the wholesale electricity market that would stop volatile gas prices setting the price of electricity produced by much cheaper renewables – cutting the cost of electricity for consumers in the long term and providing certainty for investors.”