Sheena McGuinness, partner at RSM, looks ahead to what 2019 has in store for the renewables sector.
1. A rise in transactions
Following the relative hiatus in activity in 2018 with the withdrawal of government backed support mechanisms leading to transaction volumes being down 35 per cent compared to 2017, a boom in renewables transactions in 2019 and beyond is on the cards - albeit with a change in investment style and direction. New projects in onshore wind and solar have slowed significantly with the withdrawal of ROCs and FiTs, and it’s expected that onshore wind developments will continue to decline, despite it being the cheapest form of renewable energy. The withdrawal of subsidies, together with the blot on the landscape mentality, means that the only viable option for onshore wind is repowering existing farms.
2. Time in the sun for offshore wind
The growth and activity in offshore wind will prevail in 2019 with the continued UK government support in this sector; technological advances making the operation and maintenance more cost effective; and robust Power Purchase Agreements being agreed. We have seen a switch in some of the heavy hitters in the renewables sector, such as Greencoat, EdF and Macquarie, from the traditional onshore wind market to investment in and acquisition of offshore wind projects; and this trend looks set to continue in 2019.
3. Waste to energy
Waste to energy will be an exciting space for next year, with public, media and government support for the reduction of plastic waste following the Drowning in Plastic and the Blue Planet effect. This groundswell of support will lead to further investment into waste to energy and big players such as Octopus, Foresight and Peel Environmental will be joined by other investors.
4. Innovation will drive investment
Energy trading and electric vehicles are also ones to watch in 2019 and beyond as some investors previously active in onshore wind and solar are looking outside the ‘core’ renewable energy technologies to these new areas of opportunity.