Build August PDF

Build Magazine 60 Time for Clarity heresa May’s newly appointed Government must deliver a clear, cohesive energy strategy to prevent dwindling investor confidence from impacting our energy targets, says Andy King, director of energy for Sweco UK. Despite record employment levels and impressive growth in recent years, a sustained period of political uncertainty has led to a loss of confidence from some renewable energy investors. Even before Brexit, investor confidence in the energy sector was suffering from a lack of coherent energy policy, with sudden and numerous policy changes. The Conservative Government has failed to keep Coalition promises about renewable energy strategy, with a lack of long term vision, no transparency and mixed messages from Whitehall all adding to the confusion. While the Government maintains that spending on clean energy should be curbed to “protect hard working families”, a report published by Conservative think-tank Bright Blue in June has said that renewables must be the government’s ‘Plan B’ if the (again) delayed Hinkley Point C nuclear power plant does not come to fruition. It is no wonder there is a loss of confidence in the investment community; in May, the UK fell to an all-time low of 13th in the annual Ernst & Young ‘Renewable Energy Country Attractiveness Index’, which ranks countries according to how attractive they are to investors. The Government’s ‘non-committal approach’ and ‘track record of U-turns’ was blamed. Now, of course, we have the added uncertainty caused by the Brexit vote, not to mention a new Prime Minister and the immediate dismantling of the Department of Energy & Climate Change. Will Theresa May’s newly appointed Cabinet use independence as a chance to reduce our targets for clean energy production? Only time will tell. Whatever the long term implications, it is clear that in the short-medium term the political chaos is affecting investor confidence, which is bad news for the energy sector and for those involved at all stages of energy infrastructure projects. In a survey undertaken by Sweco at All-Energy 2016 (before Brexit), almost half of respondents believed the UK will fall short of its commitments to the 2020 climate and energy package. It is important now to focus on building renewable capacity to meet our carbon and green energy targets, but only 36 per cent of respondents said they are planning to invest in a renewable energy related project in the next 12 months - citing a lack of coherent energy policy as the biggest barrier. So what must be done? Above all else, we need transparent, properly consulted and longer-term political support mechanisms to provide the stability needed for the long-term investments. If that can be achieved, the good news is that there are a number of proven energy generation technologies which can make a real difference. T Wind power is still attracting interest from investors, followed closely by energy storage and district heating/combined heat and power (CHP), a big development area that can significantly help meet the UK’s carbon commitments. The UK continues to explore the potential of interconnectors too; huge, high-voltage transmission cables which allow electricity to flow from one country to another. All is not lost of course; Sweco is involved with projects across all of these technologies and it is clear that the interest in renewable energy remains from some investors. WindEurope reports € 14bn of investment in European offshore wind projects in the first half of 2016, split across seven projects and financing a total of 3.7GW of new clean energy capacity. Crucially, roughly three quarters of this investment relates to UK projects. However, the need for clarity has never been greater and until the confusion clears, opportunities will be limited. Now is the time for the Government to show its energy credentials. Sustainability & Eco