This is the year when solar, particularly ground mounted solar, will begin to make a meaningful contribution to the energy mix in the UK.
Most importantly, it will do so at a price that politicians should increasingly be comfortable justifying to their constituents, and with a visual impact that even the most ardent countryside campaigner should be comfortable with.
In energy efficiency the Energy Company Obligation (ECO) programme together with the domestic Renewable Heat Incentive (RHI) will give a welcome boost to the overall portfolio of measures that can be implemented under Green Deal type structures in the Registered Social Landlord (RSL) and public sectors, making a welcome contribution to last year’s EU Energy Efficiency Directive.
Onshore wind, despite on-going political objections, will continue to add capacity, albeit with a slowdown in development activity over the coming years. Offshore wind is finally delivering the volumes that have been promised.
The story for bio-energy has been mixed over the last few years as DECC has struggled to articulate a stable framework, torn between value for money and encouraging generation, but we believe that we are finally getting there despite issues around grand fathering.
2013 should also herald a new Energy Act which will start to provide visibility of the way ahead for renewables.
I am sure it will be a bumpy road but it should at least be one with no obvious road blocks.
From an investment perspective, the proposed indexed revenue which will arise from the contracts for differences proposal is one that will help open up new sources of capital to fill the deficit provided by the dearth of traditional project finance.
Insurance and pension funds should be attracted to the sector to provide funds, as long as the renewable industry can provide the operational risk management expertise. This will assist us to attract the £110 billion of capital expenditure Ofgem has said that the UK requires by 2025.
In the year ahead, capital will continue to be quite challenging, especially for small and medium size projects, however the good news is that with some creative thinking many of these challenges can be met.
Mark Williamson is director of Savills Energy.