Berwick Partners held an informal round table lunch on 26th November where we were joined by a fantastic group of senior leaders from across the energy sector. Whilst enjoying some great food and wine overlooking St. Paul’s Cathedral, we shared a lively and insightful debate around the current and future challenges and opportunities of the UK wind sector.
We discussed the impact of the Energy Market Reform (EMR) on capital investment in wind and the effects of the current political climate and Government legislation on the growth of the sector. With the Government’s final decision on EMR and subsidy levels looming in December, and the well-publicised controversy over energy bills and taxes, it certainly feels that the renewable energy industry is approaching a turning point.
A large proportion of the discussion was around EMR provisions and whether these will be robust enough to convince investors, power generation and utility companies to make the necessary investments in future wind projects, easing the current hiatus that has struck in recent months. We also spoke about other factors that are potentially restricting growth in the sector such as; competition from other cheaper energy sources; the emergence of nuclear which will be given 35 years of subsidy against 15 years for wind; public opinion around the rise in energy costs; the requirement for capital in the supply chain; the impact of CfD’s and the viability of alternative payback mechanisms; the challenges around the delivery target of 8GW of installed offshore wind by 2020 from just 3.3GW currently; and the challenges facing the National Grid with regard to its timescales for delivering EMR.
Whilst the wind energy sector is undoubtedly complex, the consistent theme throughout the event was that (despite what we hear in the Press!) the current Government is truly committed to ensuring that the security of our energy supply continues. However, it is also clear that we need to simplify the message so that we, the consumer, and the investor community are able to gain confidence as we head for further changes in the market.
Victoria Jordan and Amy Speake are Consultants in the Energy Practice at Berwick Partners.
Categories: Manufacturing & Engineering Recruitment, Energy & Utilities Recruitment