Confidence in renewables still not high enough

Respondents indicated they have a poor outlook for long-term national carbon reduction targets, but were more optimistic about short term business goals.

The survey, launched in the first quarter of 2013, is updated twice a year. The overall RICI for 2013 is 48.5%, a rise of 1.3% over the inaugural survey run in the first quarter of this year, but this figure falls well short of the REA’s target of 75%, which would indicate a healthy market.

Short term prospects reasonably encouraging, according to the REA. Over the last six months more companies saw both their turnover and employment levels increase than at 2013 Q1. They are also more optimistic about the next six to twelve months than the last time the survey was conducted.

Confusing messages emanating from Whitehall about its commitment to renewables have not helped the industry. The REA says that statements, such as the Prime Minister’s pledge to ‘roll back green regulations’, risks undermining the new job and investments the renewable energy industry stands poised to deliver.

Notwithstanding reassurances from Government that renewables policies are not at risk, recent moves putting energy policy at the centre of party political electioneering are increasing the perceived risk for investors. This increases the cost of capital, and threatens the jobs and investments needed to ensure near-term energy security and deliver long-term climate change objectives.

“The renewables industry is poised to significantly grow its contribution to employment and economic recovery," comments REA Chief Executive Dr Nina Skorupska. "The growing confidence in the power sector and the Electricity Market Reform programme is good news as the UK urgently needs new wind, solar and biomass to keep capacity margins healthy. New nuclear, CCS and shale gas will not be on-stream until the 2020s at the earliest.

“However, these green shoots are still fragile, and the UK’s chances of meeting the binding 2020 targets appear remote. Although Government has confirmed that funding for renewables is not at risk in the ‘green taxes’ review, consistent messaging on Number 10’s commitment to the green agenda is absolutely vital.

“The Government currently opposes a 2030 EU renewables target and is proposing to repeal the Planning & Energy Act. Reversing those stated positions would inject a huge boost into the sector and unlock much needed new jobs and investments.”