Investment in renewable energy rose from GBP 3.1 billion to a record GBP 6.6 billion in the UK in 2016, with offshore wind representing the bulk of the investment value according to data gathered for UK law firm TLT’s Renewable Energy Finance report with industry analysts Clean Energy Pipeline (CEP).
Offshore wind investors were attracted to already committed funding consortia as projects hit important development milestones, the report said.
This resulted in offshore wind M&A activity worth GBP 3.4 billion last year, a marked rise on the GBP 384 million recorded in 2015. Banks also invested a record GBP 12.7 billion of project finance in offshore wind, up from GBP 6.1 billion in 2015.
“An active secondary M&A market boosted interest in onshore wind as large scale operational sites reached the end of their four to five year investment cycle,” TLT’s Head of Energy & Renewables Maria Connolly said.
”With a number of sites that were expected to come to market in 2016 delayed and a high first quarter figure for onshore wind M&A activity at £689million, we expect M&A activity to remain high in 2017.”
Looking forwards, M&A activity across the renewables sector will likely remain strong in 2017, with GBP 2.9 billion already recorded for quarter one, according to the report.
“The data for 2016 clearly shows a strong, robust sector adapting to a subsidy-free era. Renewables projects are a good source of long-term and stable returns for investors and funders. Scale and maturity will continue to make renewables attractive to both finance and re-finance as the secondary market expands,” Connolly said.
Biomass and offshore wind are tipped to play a critical role in moving the UK towards a future where a large percentage of the energy consumed comes from renewable sources, the report said.