UK Government's Renewable Energy Policies Will Hit Investment in Short Term, says GlobalData Analyst

UK governments decision to remove renewable energy sources from Climate Change Levy (CCL) exemption will generate around £490 million by 2016 and up to £1 billion per year by 2020 ---- ‘In the short term, the governments latest move to phase out the Renewables Obligation and impose CCL on renewables will certainly discourage investment in the sector, says analyst

LONDON, UK (GlobalData), 28 July 2015 - While the UK governments recent decision to remove renewable energy sources from Climate Change Levy (CCL) exemption will generate around £490 million by 2016 and up to £1 billion per year by 2020, the policy will have a negative impact on the countrys renewable sector, says an analyst with research and consulting firm GlobalData.


According to Prasad Tanikella, GlobalDatas Senior Analyst covering Power, the renewable energy sector may suffer in the next few years, but decreasing costs will mean that it will continue to grow in the long term.

Tanikella explains: "In the short term, the governments latest move to phase out the Renewables Obligation and impose CCL on renewables will certainly discourage investment in the sector.

"However, it is expected that ending the levy exemption will generate around £490 million during 2015-2016 for the government, increasing to £1 billion in 2020-2021."

The analyst adds that the UKs wind sector is expected to be the worst affected, although the new measures will not have a substantially detrimental impact on offshore wind installations, which GlobalData has forecast to reach 23.2 Gigawatts (GW) by 2025.

Tanikella continues: "UK wind power currently has a pipeline of over 43 GW, around 12.5 GW of which is onshore and the remainder is offshore wind.

"The UKs current offshore wind capacity is around 4.5 GW and over 1 GW is expected to come online this year. Even in current circumstances, it is anticipated that the country will add around 1 GW each year over the next five years."

GlobalData believes that other renewable technologies with high capital costs, such as biopower, could also be affected, while subsidies for solar power are currently under review.

"The Department of Energy and Climate Change is considering closing subsidies for some small-scale solar farms by 2016. The governments decision to abruptly discontinue subsidies will dent investor confidence and slow down investments in the industry," the analyst concludes.

Featured Product

RBI Solar - Dahlia Has You Covered

RBI Solar - Dahlia Has You Covered

What if you could maximize the Ground Coverage Ratio (GCR) on your next project and not have to worry about the complicated variables that come with a tracker system? With a low tilt and clearance design, Dahlia® has the highest GCR of any fixed-tilt system in the marketplace. The system is available in three tilt options (7.5, 10 and 12.5 degrees) and designed to accommodate any sized PV module. The lightweight system is engineered with fewer components, several of which are shipped to job sites pre-assembled. This design feature reduces freight costs and rapidly trims the amount of on-site installation time required to complete construction. Maximizing PV coverage on a site can lead to an increase of production, which creates greater financial return for project owners. Over 100 MW of Dahlia® projects have been deployed across the United States, in regions of variable snow and wind loads. How much can Dahlia® cover and save you on your next project?