The Renewable Energy Association is warning that strong growth in the UK renewable energy sector is being threatened by recent policy changes - multiple “sudden and severe” policy interventions over the past twelve months threaten to slow the industry’s progress.

The warning comes with the publication of REView 2016, the authoritative annual publication of the UK renewable energy industry.

The REA’s annual statistical publication has revealed record employment levels in 2015, but warned of the future impact of the Government’s numerous recent policy interventions.

The report REView 2016, produced in association with Innovas and KPMG, is the authoritative annual industry publication on employment, investment, and deployment trends in the UK’s renewable energy industry. This edition reveals growth in the deployment of renewable power and heat, but a decline in the consumption of renewable transport fuels. The report details record-setting employment levels in the renewable energy industry in 2015, and record overall levels of investment and energy consumption.

The report highlights that the repeated policy interventions of the Government are harming the UK’s position as a global leader, are slowing growth rates and are increasing the likelihood that legally binding 2020 renewable energy targets (RED targets for renewable power, heat and transport) will not be achieved.

Commenting on Anaerobic Digestion, the report says:

"Although growth has been good, recent market intelligence suggests that we are now seeing a drop in the number of projects in the pipeline, which reflects the policy situation. It is a very critical time for the AD sector, as the Feed-in Tariff, the main support mechanism for biogas CHP plants, has seen dramatic reductions and the new cap system under FiTs is significantly restricting the AD capacity that can be deployed."

Core findings of REView 2016 include:

• The total sector market value 2014/15 (for renewable power, heat, and transport) was £15,913 million. This is an increase of £982 million, which represents a growth rate of 6.6%, slightly higher than the 6.1% seen from 2012/13 to 2013/14. Growth of the rest of the UK economy was around 2.5%
• There were 116,788 employed in the sector in 2014/15, an overall increase of 4,760 people
• Renewable energy supplied the UK with 22.3% of its power in 2015, 4.6% of its heat in 2014 and 3.2% of its transport fuels in 2015
• Biomethane is emerging as a promising tool for decarbonising the gas grid, and has applications as a renewable transport fuel
• The consumption of crop-based biodiesel has fallen to only 6% from a high of 84%
• The rate of installation of grid-scale and behind-the-meter energy storage systems is anticipated to grow
• Advancements in the Electric Vehicle supply chain and in associated technologies are anticipated to drive new sales
• Policy changes over the last twelve months are likely to have a negative impact on growth rates in 2016
• The Government needs new policies in order to meet the 2020 renewable energy targets, particularly in heat and transport.

KPMG’s investment review concluded that the investment landscape is in transition after a turbulent year, but with attractive opportunities emerging that do not necessarily rely on subsidy incentives. Major cost reductions in technologies such as solar and storage, allied with new business models to exploit the benefits they can provide to energy and balancing markets, offer promising investment prospects for the future both in the UK and internationally.

Dr. Nina Skorupska CBE, Chief Executive of the REA commented:

“2015 was another record year for British renewables. Employment, investment, and deployment increased, while costs fell and the industry continued to mature. It was yet another year where the renewables industry outperformed UK growth rates.”

The industry was blindsided this year with over a dozen sudden and severe policy changes, which we expect will be reflected in next year’s report. While many businesses have been left reeling and deployment has begun to slow, as an industry we will persevere, we will innovate, and we will continue to grow.”

Simon Virley, Chair of Energy at KPMG added:

“It has been a turbulent year for the renewables sector. But the falling costs of technologies, like solar and storage, mean that exciting business opportunities lie ahead and the sector as a whole can start to move beyond subsidy.”

Click here to download the full report