Independent renewables projects attracted £227m of investment in UK last year, compared to £280m in 2016
Investment in independent green energy projects slumped in 2017 as government subsidies ran dry, according to new data released yesterday by SmartestEnergy.
The energy provider, which sources green power from independent generators across the UK, revealed just £227m was spent on independent green energy projects in the UK last year, compared to £280m in 2016 and down from a peak of £418m in 2014.
It represents a year-on-year fall of 20 per cent, according to the firm, while the pace of growth in the sector hit its lowest level since at least 2012.
The slowdown follows similar data from analyst firm Bloomberg New Energy Finance earlier this year, which showed overall clean energy investment in the UK mre than halved last yearto $10.3bn.
The news comes just a day after research suggested the UK is regaining its attractiveness to renewables investors, as plans for a number of subsidy free projects start to make progress. But industry insiders maintain that steep cuts to government subsidies and the decision to block onshore wind and solar farms from competing for price support contracts has led to an investment hiatus and could inadvertently drive up bills as the government continues to subsidise more costly clean energy sources.
The independent renewables sector encompasses projects owned by developers, farmers, landowners, and communities. Such groups have struggled to adjust to a new policy landscape of limited subsidies, even as technology costs have continued to fall.
But SmartestEnergy stressed independent renewables are playing a more influential role in the UK energy system than ever before.
Some 400 new projects came online in 2017, it said, up 6.2 per cent on 2016 and bringing the total in operation in the UK to more than 6,000. Collectively, independent renewables generators now make up 9.2 per cent of the GB energy mix and provide enough power for 8.4 million homes.
"The reduction in subsidies has inevitably slowed growth in the independent generation sector but these latest figures underline the significant role energy entrepreneurs continue to play as the UK shifts to a decentralised, decarbonised and digitised energy system," Iain Robertson, vice president of renewables at SmartestEnergy, said in a statement.
The research also echoes analysis from the latest RECAI rankings published earlier this week, which pointed out that subsidy-free solar projects are becoming increasingly viable.
Meanwhile the corporate Power Purchase Agreement (PPA) market could prove a lucrative option for independent generators. The report suggests the numbers of such agreements are likely to accelerate in coming years, as corporates seek to cut the carbon footprint of their operations.
"As we enter an era where generators will increasingly be expected to 'stand on their own two feet' and operate without subsidies, they will need to become active participants in the new energy system to develop revenue streams," Robertson added.
Only this week energy giant Vattenfall announced it was offering PPA contracts to corporate clients to support the development of its planned 165MW South Kyle onshore windfarm in Scotland.
The UK renewables market may have endured a challenging year, but the signs of the green shoots of recovery are already evident.
It has been a week of turmoil in Westminster, but where do recent events leave a UK clean energy policy landscape that was already in flux?
Long-term partnership aims to respond to customer demand and slash the environmental impact of average Brit's shopping basket
BusinessGreen brings you this week's green business news from around the world
Environment Secretary decides to stay on in current job after reportedly turning down role of Brexit Secretary