It is clear that funding and investment are critical to the industry's future if the United Kingdom is to achieve its 2020 target and not continue to lag behind its European counterparts
London, United Kingdom (PRWEB) November 19, 2011
The Renewable Energy industry in the UK is poised for strong growth over the next five years, according to IBISWorld, the United Kingdom’s largest publisher of industry research. The success of the industry over the past decade and continued support from the government and consumers will enable it to achieve the full extent of its potential. The industry has come to better understand the impediments that stand in the way of achieving its goal of generating 15.0% of the country's electricity from renewable sources by 2020. Financial and political commitment from institutions and policymakers is crucial to secure a long-term commercial future for the industry. According to IBISWorld, in the five years through 2016-17, industry revenue is expected to increase by 6.2% per annum to total £6.3 billion.
The world's energy crisis has necessitated a radical shift among policy makers and energy companies alike. Increased awareness surrounding the effects of climate change has driven an aggressive decarbonising strategy, spearheaded by the Renewable Energy industry. The United Kingdom currently generates 8.6% of its total electricity from renewable sources, representing a significant increase from 1.5% in 2006. This has resulted from both government and industry, which have realised the importance of embracing a low-carbon future and the economic opportunities that lie therein.
The United Kingdom's Renewables Obligation Plan, instituted in 2002, set out clear objectives to generate 15.0% of the country's energy from renewable sources by 2020. This prompted a wave of investment in renewable technologies, particularly wind energy, and led to dramatic increases in installed capacity and industry revenue. The United Kingdom's abundance of natural resources boded well for industry operators, as the economic benefits of renewable generation were coming to fruition. This led to significant growth in employment opportunities, as evidenced by the 16.5% per annum increase in employment over the past five years. The dismal economic climate did little to temper consumer uptake of renewable energy, further incentivised through the feed-in-tariffs plan that rewarded households for generating their own renewable electricity. In the five years through 2011-12, revenue in the Renewable Energy Industry in the UK is expected to increase by an average 7.4% per annum. During 2011-12, revenue is forecast to grow by 4.5% to £4.7 billion.
According to IBISWorld analyst, Naren Sivasailam, the prospects for the Renewable Energy industry in the UK, while bright, are inextricably linked to the level of government support and the willingness of consumers to wear higher costs. “It is clear that funding and investment are critical to the industry's future if the United Kingdom is to achieve its 2020 target and not continue to lag behind its European counterparts,” says Sivasailam. Issues such as grid connectivity, skilled labour shortages and other process-oriented shortcomings must be resolved to ensure a profitable and smooth transition to renewable energy. There is enormous scope for job creation within the industry that will benefit the general health of the economy and the industry itself. Support from businesses and households is equally important to ensure the benefits that lie in a prosperous renewable sector are realised. Although wind power will continue to lead the way, other sources such as hydropower, biomass and tidal energy present strong opportunities for growth. Prioritising access to renewable energy can advance social and economic progress in the long term, as it has the ability to strike the elusive balance between profitability and sustainability. In the five years through 2015-16, industry revenue is expected to increase by 6.2% per annum to total £6.3 billion.
For more information, download the full report from IBISWorld on the Renewable Energy industry in the UK
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