Renewables reforms ‘hamper investment’

MARKET reforms aimed at triggering a “seismic shift” towards cleaner energy may i n fact be hampering investment in the renewables sector, experts are warning.

Andrew Buglass, head of structured finance for energy at the Royal Bank of Scotland, believes uncertainty surrounding the government’s overhaul of the regulatory framework – the largest since privatisation in the 1980s – is slowing the flow of money into the sector.

Some decisions on UK projects are being put on hold, while others are progressing at a slower pace than would otherwise be expected.

“We have dialogue with all the major investors in the sector and I think it is fair to say that there are a number who have concluded that they would prefer for the moment to pursue projects elsewhere,” Buglass said.

The reforms, being led by energy and climate secretary Chris Huhne, began in earnest in July when the coalition government published its white paper on the subject.

The goal is to boost investment in low-carbon energy and cut UK emissions by 34 per cent by 2020, but there are claims these green policies will result in soaring household bills for consumers.

Buglass said one of the main concerns is the replacement of Renewables Obligation incentives that are due to be phased out by 2017. Investors also need more information on mechanisms designed to stabilise electricity prices, he says.

“We have not seen the details and we need to have that to enable people to be comfortable with what are 20 or 30-year investment decisions,” he said.

Buglass will be speaking at the Scottish Low Carbon Investment Conference in Edinburgh later this month.