Whilst renewables has had a challenging last 12 months, we have seen solar PV producing more electricity than coal in the UK during May, and reaching an all-time high of 23.9% of all UK electricity generation in June[1]. There is also now almost 12GW of solar PV installed in the UK[2].
These statistics are testimony to the sector’s resilience, creativity and adaptability despite sudden policy changes and severe cuts to subsidies.
The UK has historically played a key role in shaping EU energy policy, and has taken the lead in its implementation. We therefore think it is unlikely that there will be a complete departure from EU legislation. It is worth noting the Renewables Obligation, Feed-in Tariff and Contracts for Difference schemes were all devised by the UK Government and were not a product of EU legislation.
Since the vote to leave the EU, the Government has adopted the fifth carbon budget aimed at cutting emissions by 57% (compared to 1990 levels) by 2032, while Amber Rudd and Andrea Leadsom have both confirmed the UK remains committed to tackling climate change. A detailed future energy plan is also currently being worked on by the Government to be published later this year.
The UK’s renewable energy sector will, however, continue to lobby the Government to provide clear policy that will positively shape the future of the sector in this country. Independent, not-for-profit sustainable energy organisation Regen SW has asked its members to unite in calling for “a post-Brexit UK to recommit to our world-leading Climate Change Act; to our commitment to 15% of our energy from renewables by 2020; and a shift to a smart decentralised renewable energy system – in short to a leading international role in climate and energy”.
There may be a degree of uncertainty in the renewables sector following the vote for Brexit which in the short-term could affect investor confidence. Investors should take comfort from the fact that the industry is an ever-changing one and has shown over the last year that it can adapt and innovate. There should also be confidence that whatever happens in the aftermath of Brexit, the renewables sector is determined and will look to continue to grow and build on its success.
If you would like to discuss any aspect of this article, please get in touch with Helen Rumford or your usual Thrings contact.
[1] Research: Solar Trade Association
[2] Research: Solar Trade Association
