Britain has moved up two places to 3rd position on the biannual RECAI attractiveness index for renewable power investment, compiled by management consultants EY.
The UK and fourth-placed Germany feature among strong European climbers including Spain, Denmark & Ireland, identified in the influential assessment of investment environments favouring green power, and released this morning.
Britain’s advance in six months from fifth, now stepping onto the podium behind an unchanged USA and China, is due to this nation’s investment bonanza in power storage, and to floating wind farms winning big in recent auctions such as ScotWind.
In January floating structures soon to dot Scottish waters scored over 50% of 24.8GW capacity awarded. Close to £700m of option leasing fees will arise from 17 winning projects, analysts Ben Warren & Arnaud de Giovanni note.
More will follow. Due for award in coming weeks, Round 4 of D-BEIS’s CfD auctions will the biggest yet, its budget of £285 million targeting 12GW of new UK-wide capacity.
Batteries giving bed and grid-scale board to coulombs, watts and amps will benefit from 15 year contracts awarded in February’s auction. The 1.1GW of storage awarded then was dwarfed by 42.3GW in the T-4 Capacity Market bidding round, the EY duo observe.
EY’s second index specific to PPAs also has Britain advancing, from 7th up to fourth, behind Spain, the US and Germany. Every country in the PPA rankings’ top 10 is European, bar the US and Australia.
The EY duo note how purchase agreements in Britain have seen new buyers entering on the back of continuing rises in tariffs, thus injecting buoyancy in corporate PPA prices despite ‘competition’ from the government’s Round 4 auction, delayed until July. High wholesale energy costs and increased capex costs arising from supply chain problems, including continuing lockdowns affecting Chinese manufacturers, have resulted in an uptick in the UK’s PPA benchmarks.
Amid global turmoil in energy markets arising first from the post-Covid gas squeeze and subsequently shunning of Russia’s sanctioned oil and gas, the EU’s accelerated renewables roll-out in the Commission’s 5-for 50 plan puts more gloss on green power, the report notes.
The report covers 40 major economies. Saudi Arabia enters, but still props up the cohort.
Download today’s EY RECAI report here.