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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
The price of uncertainty in renewable projects
8/2/2023
8 min read
Renewable energy projects are dogged by uncertain regulatory and political criteria. Here, Jack Birchenough, Associate, and Rebecca Armstrong, Partner, within the Energy, Marine and Natural Resources practice at Clyde & Co, take us through some of the challenges and options to overcome them.
Regulatory and political stability are pre-requisites for the renewable energy industry to flourish, as these lead to access to the finance and insurance necessary to allow long-term investments. The path to more certainty in this sector still seems long. Let’s examine historical and upcoming challenges for the sector and the options available to overcome them.
Historically, the renewable energy sector has suffered political and regulatory instability.
Feed-in tariffs (FITs), power purchase agreements (PPAs) and contracts for difference (CfDs) played an important role in encouraging early investment in renewables technologies. By guaranteeing the price that a project will receive per kWh over a decade or more, many countries have provided the ‘certainty’ to enable projects to be financed.