BMI View: We expect the UK non-hydropower renewables sector to slow down significantly over the next decade, as sweeping subsidy cuts will lower the attractiveness of the market and hit investor confidence. Given that DECC estimates that the subsidy spending allocated under the LCF is over budget for the next five yea rs, we see little room for the C onservative government to backtrack from its austere renewables strategy.
|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
A Brexit on June 23 could put the UK offshore sector at risk, as there is uncertainty over how EU-level funding to the UK would be impacted. As one of the EU's main funding beneficiaries for energy project funding, such an event could pose a pertinent obstacle to the development of capital intensive offshore wind power.
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 (DECC) 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. We therefore see little room for the Conservative party majority government to deviate from its austere renewables policy.
Small scale and large scale solar power, as well as onshore wind power, can no longer access the renewables obligations certificate scheme (ROC) should they not have access to the various grace periods set out by the government. From April 2015, new solar power projects with a capacity over 5MW 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 CfD scheme for onshore wind - which it expects to be deployed without subsidy support.
On July 8 2015, the first all-Conservative Party budget in 19 years held the announcement that businesses that use electricity that is generated from renewable sources will no longer be allowed to claim a discount from the UK Climate Change Levy (CCL). The CCL is a levy charged on electricity, coal and natural gas supplied to large industrial and commercial consumers in the UK - in an effort to encourage business users to become more energy-efficient and to reduce CO2 emissions.
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.