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UK drops a spot in EY’s RECAI as grid constraints pose global transition challenge

The CfD auction in December is set to provide a significant boost to the UK's renewables sector.

The CfD auction in December is set to provide a significant boost to the UK's renewables sector.

Despite a thriving renewables sector, the UK has dropped one place in EY’s 58th Renewable Energy Country Attractiveness Index (RECAI).

It has moved from fourth to fifth place, as France’s recent focus on offshore wind pushed it ahead of the UK, although the report noted that investment in the UK's renewables sector is set to be boosted significantly in the coming months through the Contracts for Difference (CfD) auction.

Set to take place on 13 December, the auction will offer £265 million, with £200 million for offshore wind projects, £55 million for emerging renewable technologies and £10 million for established technologies like onshore wind, solar and hydropower.

Additionally, the UK’s launch of its hydrogen strategy in August will likely bolster its position going forwards. The strategy detailed a twin-track approach designed to support both green hydrogen and blue hydrogen, with a general target of 5GW of capacity by 2030.

A consultation is underway for the £240 million Net Zero Hydrogen Fund, which will support commercial deployments of new hydrogen production plants to help hit that target.

Whilst progress is undoubtedly being made in the rollout of renewables in the UK, the RECAU revealed that globally this push to integrate increasing volumes of renewable generation is putting a strain on grid infrastructure.

Investment will be required to upgrade and expand energy transmission infrastructure across the globe. In Britain, it was a key point across network operators’ RIIO-ED2 plans, with network readiness required not just for renewable integrate but also growth in electrified solutions such as electric vehicles and heat pumps.

“With global leaders convening at COP26 in November, we are approaching what could be a watershed moment in combatting the climate crisis,” said Arnaud de Giovanni, EY global renewables leader.

“Increasing investment and policy support has enabled renewables growth to continue at breakneck speed. If sustainability goals are to be met, however, a 50% increase in grid spending could be needed over the next decade as markets adapt for a net-zero future.”

Once again the US topped the RECAI, and is expected to hold on this spot thanks to new initiatives announce under President Biden. Here too, significant investment in grid infrastructure will be key to enable continued emission reduction.

China and India came in in second and third position respectively. Across the top ranking of the 40 countries included, the strong growth of hydrogen and renewables – in particular offshore wind – stood out as particularly attractive.

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