Stable policies and collaboration needed to fuel renewable energy growth

The success of the renewable energy sector relies on stable and consistent government policies, a principle that holds for all sectors. In its Manifesto 2024, the EIC advocates for clear, long-term objectives that remain steadfast despite political changes. It calls on governments to enact legislation that ensures compliance and provides a reliable framework for the industry. Such policy consistency is crucial for building investor confidence and driving sustained growth in renewable energy projects.

Strengthening the supply chain

A robust supply chain is critical to supporting the growing demands of the renewable sector. This includes developing the necessary infrastructure – such as national grids capable of handling increased capacity and advanced energy storage solutions – to deal with the intermittent nature of renewables (for example storing excess power from wind turbines when winds are strong).

Addressing supply chain limitations will be crucial in accelerating the deployment of renewable energy systems. Currently, supply chain constraints are often blamed for delays in net-zero projects. However, EIC research detailed in the Survive and Thrive VI Insight Report shows that the supply chain, while busy, is not at full capacity and requires expansion. This growth can be achieved through sustained and predictable project pipelines, the enhancement of local manufacturing capabilities (such as building more wind turbine factories in the UK) and the development of a skilled workforce that is capable of handling the anticipated surge in renewable projects. These improvements will be essential as nations push for faster implementation to meet net-zero goals and energy demands.

UK goals and challenges

In the UK, investments in renewable energy are set to dominate up to 2030, with ambitious targets to treble solar capacity to 48GW and double onshore wind capacity to 30GW. Offshore wind aims for 55GW by 2030, with 14.6GW already operational. Indeed, the latest Contracts for Difference (CfD) auction round 6 secured 131 new projects capable of generating 9.6GW of green energy.

However, challenges still need to be addressed, particularly around grid connectivity and slow project approval processes. These bottlenecks highlight the need for the UK to accelerate project construction and leverage its expertise in wind power to maintain a global leadership position in renewable energy.

Member insights on policy

EIC’s member companies have provided valuable feedback on the practical steps needed to enhance the renewable energy sector. Their insights reflect the on-the-ground realities and underscore the importance of targeted policies and support. Innovation is the lifeblood of the renewable energy sector, and companies interviewed by EIC stress the need for policies that incentivise investment in new technologies and foster a culture of continuous improvement. Such incentives can drive the development of cutting-edge solutions that enhance renewable energy systems’ efficiency and effectiveness.

Speeding up the deployment of renewable projects requires stable policy. Now that the UK has a new government, there is optimism that policy will be more predictable. However, conversations with companies around the globe indicate that policymakers should adopt a long-term, non-partisan approach to achieve net-zero targets. Consistent regulations are necessary to provide the predictability needed for substantial investments in renewable energy.

Supporting SMEs

Small and medium-sized enterprises (SMEs) are crucial players in the renewable energy supply chain. Simplifying access to funding and creating supportive policies for SMEs can drive innovation and help such companies scale. Smaller companies often face difficulties in securing loans and other financing options. However, at the Energy Exports Conference in Aberdeen in June 2024, a Santander banker told the audience that funding for renewables projects is available, with banks eager to provide funding to the right projects. To secure financing, energy companies – including those in the supply chain – are encouraged to have solid financial records and thoroughly risk-assessed projects. While some conference participants suggested that insurance companies could mitigate some of this risk, others argued that government intervention – such as offering loan guarantees for certain sectors – might be a more effective solution.

Collaborative framework for success

While financial incentives are key to SMEs and larger businesses, companies working in renewable energy stress the need for collaboration among industry players, supply chain partners and governments. By working together, stakeholders – businesses and governments – can share knowledge, pool resources, and drive innovation, leading to more effective and scalable solutions.

It is clear that the renewable energy sector is marked by numerous challenges and opportunities. By implementing stable policies, offering financial incentives, and fostering collaboration, we can create a robust framework that supports innovation and sustainability.

By Mahmoud Habboush, Communications Adviser, EIC

Opportunities UK CfD auction round 6 results: 131 projects = 9.6GW

Offshore wind

10 projects: 9 fixed-bottom (4.9GW) and 1 floating

(400MW) = 5.3GW

Onshore wind

22 projects = 990MW

(909MW in Scotland)

Solar

93 projects = 3.3GW

(under 2.9GW in England)

Tidal

6 contracts = 28MW 

(5 in Scotland)

Challenges

Fragmented policies

Need for consistent long-term policies to attract and sustain investment

Infrastructure bottlenecks

Investment needed in grid connectivity, ports, vessels and transport equipment

Lengthy approval processes

Complex and time-consuming project approval procedures

Solutions

Financial incentives

Support mechanisms to make projects financially viable and reduce financial barriers

Collaboration

Partnerships between government, industry players and supply chain partners to drive joint efforts and shared success

Standardisation

Adoption of uniform standards to streamline processes, improve efficiency and lower costs

EIc members speak out

Invest, collaborate, standardise, succeed

Torben Andersen, Global Director Wind, Blue Water Shipping 

To support offshore wind, the logistics industry must invest heavily in ports, vessels, transport equipment and related infrastructure before projects are confirmed. A major challenge is the constant delays in the project pipeline, resulting in reluctance to make investments.

Policymakers must understand that the focus shouldn’t just be on the number of projects or megawatts; location is equally important.

Politicians and industry must work together on permitting, infrastructure development, legislation and financing. This collaboration will build confidence in the logistics and offshore wind industries that projects will actually materialise, thereby attracting essential investments for their successful installation.

Jenni Lewis, Managing Director, Caribbean, Mexico and US, RelyOn Nutech

For workforce development, the biggest challenge is in adopting a common standard for training and competency. The renewable sector is newer in the US market, so there aren’t as defined regulations and industry guidelines for management systems. These would include guidance for training and competence programmes, safety programmes and auditing good practices. It’s currently left up to the operators, project management and service providers. 

Government, accrediting bodies, industry and training providers can collaborate to define baseline standards for the various positions and site types. Lessons from other energy sectors and similarly regulated industries, such as manufacturing, could be valuable.  

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