The UK has become more attractive for renewable energy investment over the past six months thanks to the return of the Contracts for Difference auction.
In the 55th Edition of EY’s Renewable Energy Country Attractiveness Index (RECAI) the UK climbed to sixth position, moving ahead of India.
Despite the current challenges caused by the COVID-19 pandemic, renewable energy remains resilient, with the impact expected to be felt only in the short-term according to the report's author, Ben Warren.
He found that there have been many positive trends in the renewable energy markets around the world, including growing utility scale storage and increased environmental concern among investors that put the market in a good place to resume growth once COVID-19 is over.
“None of this is to diminish the profound challenges caused by a pandemic, the like of which none of us has experienced before," Warren continues. "But it is important to recognise the central role that clean, low-carbon energy generation will play in the global economy of the future.”
In March, the UK government announced that there will again be CfD auctions for Pot One technologies, such as onshore wind and solar. This was enthusiastically welcomed by the renewable energy sector, which has been calling for the return of such auctions for years.
Previously, Pot One technologies were only included in the very first round of auctions in 2015.
The return of the mechanism is hoped to spur on the growth of renewables in the UK to help the country reach its legally binding target of becoming net zero by 2050.
There is currently a formal consultation underway looking into potential changes to the CfD scheme, following which it's hoped there will be more clarity regarding the support it can provide. It has been extended due to COVID-19.
The level of the UK's attractiveness according to EY's rankings has been reasonably turbulent in recent years. The rise of subsidy-free solar and surging wind boosted the UK up EY's rankings in May 2018, but Brexit concerns caused it to slide back a place come November.
In November 2019, the UK hit its highest position for two years thanks to the offshore wind sector's vibrance.
The US topped the EY RECAI for the first time in years, as surging wind and solar along with tax incentives helped it leapfrogg China. Spain was another winner in the rankings, buoyed by the ambitious targets brought in the recently elected government.
However, India dropped down to seventh in a “disappointing” move for the country that suggests it may now miss its 175GW of renewables by 2022 target.