8 hours ago
UK loses top spot for foreign investment in renewable energy
The number of green energy and utility sector projects attracting inward investment into Britain fell by 57 per cent last year, according to a new analysis.
The slump resulted in the UK losing its top spot to France as the leading European destination for foreign direct investment into utilities and energy supply, EY found.
The professional services firm pointed to the contrast with a 'surge in inward investment in renewables in 2023', owing to the timing of auction rounds for renewables. However, the decline comes at a time that the government is seeking to step up investment to secure its decarbonisation goals and to reduce Britain's reliance on volatile international gas markets.
Lee Downham, energy and resources lead at EY in Britain, said: 'The UK must continue to attract a strong pipeline of renewable investments if it's to achieve its energy security ambitions.
'While investors have traditionally viewed the UK as an appealing destination for clean energy, lengthy planning procedures and slow grid connectivity have been seen as drags on UK attractiveness, in addition to uncertainty over future pricing.'
The government is still deciding whether to implement a radical overhaul of the UK's wholesale electricity market to introduce regional zones, a move that critics argue will deter investment.
The EY analysis covers investment into the electricity, gas, water and waste utilities sectors. A spokesman said there was a particular focus on green energy and renewables, as well as some nuclear-focused investments.
Investments ranged from the construction of new solar farms, energy storage and hydrogen facilities, to the establishment of new headquarters, manufacturing operations, maintenance hubs and research and development facilities.
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There were 39 such projects that attracted foreign direct investment into the UK last year — creating 1,452 jobs — down from 93 projects the previous year, which created 4,819 jobs, according to EY's UK Attractiveness Survey.
France had 74 such projects, up from 65 in 2023, Germany ranked third and Spain fourth.
Across Europe there was a 21 per cent decline in foreign direct investments into the sector year on year.
