Britain slips in renewable energy investment in France as green projects invest in green projects
According to new data from EY, the UK lost its premier destination for European investment in renewable energy and utility projects as the sharp decline in new developments puts France ahead.
The number of green energy and utility projects supported by overseas investors in the UK fell 57% in 2023, down from 93% to just 39% in the year. The downturn has pushed Britain overtaken by France, with its foreign-supported projects increasing to 74, up from 65 in the previous year.
EY’s annual UK Attraction Survey found that a sluggish investment in clean energy has resulted in a 70% drop in new jobs, from 4,819 in 2022 to 1,452 last year, despite surges in renewable energy investment in Europe.
EY’s UK head of energy and resources Lee Downham warned that unless urgent action is taken to simplify planning and grid connections, the country’s net zero targets and energy security targets will be at risk.
“If it is to realize its energy security ambitions, the UK must continue to attract strong renewable investments,” he said. “Although investors have traditionally seen the UK as an attractive destination for clean energy, lengthy planning procedures, slow grid connectivity and uncertainty about future pricing are seen as resistance to UK attractiveness.”
The analysis was conducted during a politically sensitive period as the Labor government sought to rebuild the UK’s green industrial base while struggling to cope with an energy system that still relies on the international gas market.
Investment projects tracked in the report include solar farms, energy storage sites, hydrogen facilities, and infrastructure such as R&D hubs, new headquarters, manufacturing plants and maintenance centers.
The UK’s 39 new green and utility projects in 2023 represent the collapse of internal investment in the country’s centre for decarbonization and reindustrialization. By contrast, support in France surged with positive domestic incentives and simplified licensing procedures.
Germany and Spain ranked third and fourth in EY’s European rankings respectively. Across the continent, foreign direct investment (FDI) fell 21% year-on-year to the utilities and energy sectors, reflecting widespread concerns about inflation, supply chain disruptions and the complexity of energy regulation.
The report also highlights ongoing investors’ uneasiness over the UK government’s scrutiny of the wholesale power market and proposes regional pricing. Critics believe this will create investment uncertainty and may penalize projects on some of the country’s grid infrastructure.
While some of the UK’s high-profile clean energy projects, including large offshore wind farms, have not yet made progress, France has taken advantage of stronger national support and faster permits due to program delays and cost inflation.
With global competition for clean technology investments, EY’s findings could offer challenges for bolder industrial policy and regulatory reforms to ensure the UK can regain its leadership in renewable energy and deliver on its commitment to a cleaner, safer energy future.
