Essay by Eric Worrall
Renewable energy investors in the UK are about to face financial difficulties, like Spanish investors in 2010?
UK Energy Secretary gets power to achieve renewable energy income
Energy price bill gives government expanded powers
Industry warns measures could threaten green energy investment
Via Will Mathis
October 26, 2022, 21:32 GMT + 10Follow us at @BloombergUK and more Facebookand end your day with Newsletter Readout with Allegra Stratton.
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As the government focuses on a change in leadership, the bill is being worked its way through the parliamentary procedure and completes the final stages of approval. become law While providing vital support to households struggling with energy costs, it will also allow the state – if it chooses – to bypass the country’s energy regulator, by limiting the revenue of generators and regulatory suppliers.
The energy industry has warning that Measures could strengthen the stable regulatory environment, which is key to boosting UK wind energy investment. The UK wind power industry is one of the largest in Europe, and crucial to the country’s climate goals and ambitions is independent of volatile fossil fuel markets. .
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One aspect of the bill is to limit revenue from low-carbon power generation such as wind farms, solar parks and nuclear plants. The legislation gives the government the power to enact the measure, but leaves out the details of the limit to be decided later.
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The UK government’s new power to limit returns from green energy just adds to evidence that renewables can be a high-risk investment.
The 2010 Spain retroactively cuts renewable energy subsidies caused a massive wave of bankruptcies, 62,000 investors mistook what they thought was a stable financial arrangement with the Spanish government.
Reading my essays, you might get the impression that I don’t care about people losing money on renewables, but that’s not the case. Many of the people bankrupted by the collapse of the Spanish green subsidy were ordinary people, mothers and pop investors who thought they could trust their politicians to keep their promises. their. Some of the victims of Spain’s 2010 green subsidy crisis lost their homes.
I am not a lawyer, legal expert or investment advisor, but if the UK Government exercises these new powers to cut green investment returns and if the value of green energy investments If there is a sharp decline, investors may have a path to legal compensation. .
Former HSBC responsible banker, Stuart Kirk, recently stated that there is a lot of pressure on advisers to talk about the prospects of green investments.. If this alleged pressure prevents investment advisors from disclosing known risks when giving investment advice, then UK courts could rule investment advisors and banks liability for any losses suffered by green energy investors.
In my opinion, the risk of serious loss due to arbitrary government profit limits or rule amendments should have been obvious to anyone with specialized knowledge of the industry, after what happened. in Spain.
If you are in this situation, please do not take what I have just said as legal or investment advice. As I said, I am not an attorney, legal professional or licensed financial advisor. I strongly advise those who believe they have lost money because of faulty green investment advice to review their personal circumstances with an attorney, before attempting any legal action to recover. recover their financial losses.
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