BMI View: We have not made alterations to our renewables capacity forecast in the wake of Brexit, as a plethora of punitive subsidy cuts over 2015 means that we already have incorporated a slowdown in the sector. As the exception, offshore wind power will drive growth over the next five years due to robust government support and a robust project pipeline. Current policy uncertainty will ultimately slow the sector post-2020 as projects in the preliminary stages are halted.
|e/f = BMI estimate/forecast. Source: EIA, national sources, BMI|
|Generation, Non-Hydropower Renewables, TWh||73.720||76.860||79.560||86.940||89.920||92.040||94.070|
|Generation, Non-Hydropower Renewables, % y-o-y||30.920||4.250||3.510||9.280||3.420||2.360||2.210|
|Capacity, Non-Hydroelectric Renewables, MW||28,105.6||30,122.7||31,718.0||34,335.6||35,390.2||36,345.4||37,183.1|
|Capacity, Non-Hydroelectric Renewables, % y-o-y||25.0||7.2||5.3||8.3||3.1||2.7||2.3|
Latest Updates And Structural Trends
The UK voted to leave the European Union on June 23 2016. We do not expect this to have a significant impact on our 10-year forecast for UK's non-hydropower renewables sector. This will be the result of the punitive cross-sector subsidy cuts that have been implemented over the last year under the Conservative government. These cuts prompted us to already take a downbeat view on the UK renewables sector. Similarly, we continue to expect strong government support for the offshore wind sector amid tightening power supply margins over the coming decade. That said, the risk for capital intensive offshore wind projects in the preliminary phase of development being delayed have increased. The result is that we are cautious to include projects that target commissioning beyond 2021 into our forecast.
On March 16 2016, UK Chancellor of the Exchequer George Osborne announced the budget for 2016 - which entailed significant cost reduction targets for offshore wind between 2021 and 2026. The budget also earmarked funding for a total of 4GW over this timeframe, which entails that a maximum of 660MW of offshore capacity will be supported annually.
Wind power generation registered a growth spike over 2015, as a result of the strong winds over the year. The y-o-y growth figure of 26.4% means that the sector comprised about 13% of total power generation, and 55.7% of total non-hydropower renewables power generation.
The Department of Energy and Climate Change forecast that expenditures for renewables subsidy schemes will go over the GBP7.6bn 2020-2021 spending limit allocated under the Levy Control Framework by GBP1.5bn.
Small scale solar power, as well as onshore wind power, can no longer access the Renewables Obligation Certificate scheme, should they not have access to the various grace periods set out by the government. On March 31 2016 we also note that the grace period for solar power facilities with a capacity larger than 5MW ended. As a result, all new solar power projects with a capacity over 5MW will have to qualify for support under the contracts for difference scheme, alongside other renewable energy technologies such as wind and biomass. The government is also contemplating whether to close the Contract for Difference scheme for onshore wind - for which it expects new projects to be deployed without subsidy support.
The United Kingdom Renewables Report researched at source contains BMI Research's assessment of the current renewables market in United Kingdom. The report also contains historical data together with forecasts to end-2018 covering electricity generation (TWh) and electricity capacity (MW).
The renewables sectors covered in the report include Wind, Solar, Geothermal, Tidal and Wave, and Biomass (See Table of Contents for exact coverage). The report also features details on government green energy agendas and funding opportunities, as well as presenting a detailed list of key renewables projects currently being planned or undertaken in United Kingdom, their capacity, the timeframe of construction and their current status.
The report discusses the various energy policies currently in force, including targets, subsidies and the relevant infrastructure developments or limitations which might impact on renewables growth, analysing the potential effects of regulatory changes in conjunction with the background macroeconomic outlook. Finally, there is a general overview of the competitive landscape in United Kingdom, together with a detailed summary of the main utilities and manufacturers present and their business operations.
BMI's United Kingdom Renewables Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with unique independent forecasts and competitive intelligence on the United Kingdom renewables industry.
- Benchmark BMI's independent renewables industry forecasts for United Kingdom to test other views - a key input for successful budgeting and planning in the renewables market.
- Target business opportunities and risks in the United Kingdom renewables sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in the country.
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering the renewables market in United Kingdom, regulatory changes, major investments and projects and significant multinational and national company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the renewables sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2010-2012) and forecasts to end-2018 for electricity generation (TWh) and electricity generating capacity (MW) for each individual renewables sector present in the country.
These in turn are broken down into:
Electricity Generation: Overall capacity (TWh), growth % change year-on-year, KWh per capita, % of Total Non-Hydropower renewables generation, % of total electricity generation.
Electricity Capacity: Overall capacity (MW), growth % change year-on-year, % of non-hydroelectric renewables capacity and % of total capacity.
These forecasts are in turn supported by explicit assumptions, in conjunction with analysis of the key risks to the main forecast.
Business Environment Rankings
BMI's Renewables Business Environment Rankings provide fully comparable Risk-Reward Rankings aimed at investors in the regional renewables market.
The rankings methodology makes sophisticated use of various industry, economic and demographic data point.