The UK has returned to the top ten in global rankings of countries where it is best to invest in renewable energy, according to EY's latest Renewable Energy Country Attractiveness Index (RECAI).

Cloudy outlook for renewables

But despite the UK jumping four places to tenth position since the previous index was published last October, EY warns the outlook for the industry in Britain “remains cloudy amid a lingering lack of clarity around targets and subsidies”.Meanwhile, the US has dropped to third place in the index, behind China and India, because of the “marked shift” in policy since President Trump was inaugurated in January.

US rolls back on climate change policies

“The report identifies the US government’s executive orders to roll back many of the previous administration’s climate change policies; revive the US coal industry; and review the US Clean Power Plan, as key downward pressures on renewable investment attractiveness,” said EY.Ben Warren, EY’s head of energy corporate finance, said, “Movements in the index illustrate the influence of policy on renewable energy investment and development – both productive and detrimental. Supportive policy and a long-term vision are critical to achieving a clean energy future.”

China: investing in renewable power

China's RECAI elevation came after the National Energy Administration (NEA) announced plans in January to spend $363 billion developing renewable power capacity by 2020. According to the NEA, the programme will see renewables account for half of all new generating capacity and create 13 million jobs.India's steady rise up the rankings was attributed to the government’s plan to build 175GW in renewable energy generation by 2022 and to have renewable energy account for 40 per cent of installed capacity by 2040.Mr Warren said, “The renewable energy industry is beginning to break free of the shackles that have stalled progress in the past. More refined technology, lower costs and advances in battery storage are enabling more widespread investment and adoption of clean energy.”Britain's improvement in the standings was the result of a “more settled” investment environment after years of subsidy cuts, said EY.

Other countries' profile decreasing

Mr Warren added, “The UK’s reappearance in the RECAI top ten is the result of other countries falling away – notably Brazil which cancelled a wind and solar auction in December - rather than any particularly encouraging resurgence.“The UK continues to underwhelm investors who are waiting to see if future UK policy will support and encourage the renewable energy industry towards a subsidy-free environment, where consumers can benefit from the UK’s excellent natural resources for renewable energy.“Investors are still waiting for clarity around the post-Brexit landscape. Question marks linger around renewable energy targets, subsidies and connections with mainland power markets. Unfortunately, the likelihood of getting complete answers to those questions before the UK exits the EU are slim.”

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EY pointed out that, in April, the UK launched the second round of renewable energy auctions for Contracts for Difference (CfD) subsidies. The government plans to allocate £730 million of annual funding over three rounds, including £290 million in the current round.“The CfD funding allocation is relatively modest and there is continued uncertainty around the outcome of the mechanism. In the absence of a buoyant CfD regime, it’s difficult to see how the UK can force its way back among the front runners for renewable energy investment,” said Mr Warren.For related news and features, visit our Enterprise section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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