UK downgraded on global energy rating

The World Energy Council rates countries in their energy and climate policies. The recent rating is available here on the WEC website. The WEC points out that only two countries have the triple A rating. This post from Reuters in The Guardian shows that the UK has lost that rating, because of the government scrapping onshore wind subsidies and cut solar subsidies.

 

Britain loses top energy rating after green policy U-turns

Britain has lost its top-notch energy policy rating from the UN-accredited World Energy Council after the government prematurely cut some renewable energy subsidies, creating uncertainty about how it will address support in future.

The World Energy Council has downgraded Britain to an AAB rating, from AAA, in its annual “energy trilemma index”, which ranks countries’ energy and climate policies based on the issues of energy security, equity and sustainability.

The downgrade reflects the damage the subsidy cuts have caused to Britain’s reputation as an attractive renewable energy market.

Earlier this year Britain scrapped subsidies for onshore windfarms, closed support for small-scale solar projects and changed the way other renewable energy projects qualify for payments, saying they were becoming too costly for taxpayers.

“The UK government must give more predictability to investors in the way the electricity market reforms are progressed,” said Joan MacNaughton, executive chair of the World Energy Trilemma study.

trilemma

Britain rewards low-carbon energy projects, such as windfarms, through a contracts-for-difference mechanism that predetermines a minimum price for electricity generated.

“More transparency is needed about the future approach to contracts for difference and the levy control framework,” MacNaughton said. The levy control framework helps determine the government’s budget to allocate subsidies to low-carbon energy projects.

The changes in government support for renewable energy have already cost hundreds of jobs in Britain and the prospect of lower returns is expected to scare off renewable energy investors.

4 thoughts on “UK downgraded on global energy rating

  1. Whilst this is a very thought provoking article, as all your articles are, this poses more questions than it solves, such as what are the criteria used for the energy trilemna index, especially for energy security. In addition why was 2013 significantly higher than the previous or the following year?

    • It is a good question that we can’t answer. I think we need to go to WEC and find out more about their methodology. We really aren’t that familiar with this. But the WEC has a good reputation. It will be holding its regular Congress next year in Istanbul where thousands will be attending. We put a link to WEC page. Maybe more is revealed there.

  2. Pingback: UK downgraded on global energy rating | Fuel Included

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