This week, support for the beleaguered renewables industry came from an unlikely source. Professor Jacquie McGlade is chief environment scientist for the UN, someone who you would think knows a lot about the renewable agenda. She expressed her disappointment that the UK has appeared to do an about turn and is running headlong away from technologies such as solar and wind whilst the rest of the world is rushing forward with open arms.
She told the BBC:
"What I'm seeing worldwide is a move very much towards investment in renewable energy. To counterbalance that you see the withdrawal of subsidies and tax breaks for fossil fuels. What's disappointing is when we see countries such as the United Kingdom that have really been in the lead in terms of getting their renewable energy up and going - we see subsidies being withdrawn and the fossil fuel industry being enhanced."
Whilst politicians still seem intent on coming out with the same tired old phrases about how they are trying to get a better deal for bill payers, there is some concern in the wider global arena that the UK has decided to abandon its leadership on climate change. McGlade even went as far as to call the signal that the UK was sending out to other countries ‘perverse’.
What Does a Reset Mean?
One thing that hasn’t been discussed in great deal is the Government’s idea of a reset to the industry and what that actually looks like. You’d be forgiven for thinking that they may not have much of a clue themselves with the lack of information that has been forthcoming. The sensible option would have been to say we are going to get rid of this (the FiT) and replace it with this (place your own idea here). All we have is a spurious promise that they are committed to renewables and something is on its way.
Meanwhile some big investors are starting to look elsewhere. According to the same BBC article, the CEO of ACWA Power in Saudi Arabia said:
"Everyone is running around the world looking for other places. Thank you very much, I've picked up experience now, the UK is not the best bet, let me go somewhere else. Even the UK companies are looking aggressively elsewhere."
Most people in the industry agree that the FiT subsidy should eventually be phased out but cutting by 87% in fell swoop has brought cries of frustration from the market and outside investment. According to a recent report by EY, government initiatives to remove the FiT and threats to other subsidies in the future is baffling many investors to the point where they are taking their business elsewhere.
The organisation suggested that this might indeed mean that the UK was trying to make renewables the first unsubsidised market in the world. If that’s the case many in the UK believe they are making an unholy mess of it, akin to throwing a baby from its pram in the vain hope that it will land on its feet.
