Energyear’s Inaugural UK 'Investment & Developments' Congress 2023: Brown Rudnick’s Key Takeaways

Congratulations to Energyear for successfully hosting its inaugural “Investment & Developments” Congress in London on May 10. With panel sessions focused on the European solar market; the Spanish, Italian, Polish, Southeast European, Baltic and U.K. renewable energy markets; capex; global market competitiveness; energy storage technology; asset turnover and green hydrogen, the event provided an excellent overview of current market activity and trends across the European renewable energy sector.

Attended by more than 200 delegates from leading investors, finance providers, developers, manufacturers and advisers, the conference sparked many interesting discussions regarding Europe’s path to Net-Zero and the challenges and opportunities that it presents for the region’s energy sector.

Throughout the conference, we heard many recurring themes – energy security, grid constraints, planning and permitting backlogs, supply chain disruption, skills and labour force shortages, the scarcity of high quality, investable projects and the resultant slow pace of deployment, bureaucratic inertia, and the rise in protectionism and how to counter it. However, despite a myriad of challenges, the attendees’ overall mood was positive and optimistic given that energy transition seems set to remain one of the most critical and attractive sectors for the foreseeable future.

Paul: It was my pleasure to moderate the session “Energy and competitiveness: Could Europe's commitment to sustainability make it less competitive than other economic regions?” And to be joined by my expert panellists, Harry Beamish, partner at Becquerel Capital; Pablo Pérez-Bedmar, head of marketing, product and international at POWEN; and Jan Libicek, investment director at Triple Point.

James: It was my pleasure to moderate the session on “The U.K. market: Key points to define your investment strategy,” and to be joined by my expert panelists, Harry Wilder, EMEA business development manager at Canadian Solar; Matt Black, managing director at IG Renewables; and Francisco Cabadas, head of renewables and optimization at JRL Group.

Some key takeaways from the panel sessions throughout the day:

• If we are to win the global race to net zero, we need greater collaboration between governments (at national, regional and local levels), trade associations, developers, investors, funders, local community representatives, insurers, advisers and the other actors and stakeholders in the energy ecosystem, not only in Europe, but globally.
• Europe is at risk of becoming less competitive than its peers due, among other things, to its commitment to sustainability. Some argue that this commitment, coupled with the sheer scale of investment needed to achieve global net zero, means that Europe must recalibrate its approach to net zero. However, others view this commitment as a price worth paying in the short term and one that should ultimately pay dividends in the long run.
• Whilst more protectionist measures could lead to "a race to the bottom," Europe must strive to protect itself and its businesses in an increasingly competitive global marketplace (as, of course, must other regions).
• If Europe and its businesses are to remain key players through 2050 and beyond, urgent action is needed to address energy insecurity, insufficient grid interconnectivity and chronic grid connection problems, severe planning and permitting delays, energy and infrastructure financing gaps, supply chain dislocation, and labour and skills shortages. This will require more ambitious targets and incentives and more business-focused laws and regulations.
• The need to balance the energy trilemma, which, arguably, has never been more difficult than during the current energy crisis, will continue to drive both competition and collaboration between countries and regions and between developers, investors and funders, which will hopefully serve to expedite the energy transition.
• Europe should actively seek to replicate, to the fullest extent possible, the most attractive, energy transition-focused measures and initiatives adopted in other countries or regions (as indeed should those other countries and regions).
• The push by Europe to develop its own solar panel manufacturing industry is likely to raise panel prices in the short-to-medium term but may prove beneficial for the sector in the long-term.
• Investors are increasingly focusing on investing in platforms and diversified portfolios, rather than individual projects, and continue to look for higher returns in less mature markets, particularly those with stable legal and regulatory environments.
• Developers and investors will increasingly focus on hybrid renewable energy projects, and projects involving the co-location of energy storage. It is therefore imperative that Europe’s laws and regulations, planning and permitting regimes and grid networks are swiftly adapted to accommodate these projects.
• Extensive due diligence on projects, supply chains and third-party contractors and effective local community engagement have never been more important.
• Local content requirements are likely to become more significant in the renewable energy sector, with such requirements already being in place in many key European and Middle Eastern markets (although with many different mechanisms to consider) and through the tax credit guidelines under the U.S. Inflation Reduction Act.
• Provided Europe can regulate, innovate and collaborate effectively over the coming years, its prospects of remaining a key global player in the low carbon energy transition by 2050 and beyond are bright.

Thank you to the Energyear team. We look forward to participating in London 2024!