General Election: renewable energy investors speak out

What do you want to see from the new government?

Tom Williams, Partner at Downing LLP, Investment Manager of Downing Renewables & Infrastructure, said: “A thoughtful and stable policy environment is essential for the UK to maximise its renewable energy generation. For too long there has been flip-flopping from one unworkable policy to another, with no long-term planning or any coherent energy strategy to speak of.

“From the new government we would like to see clarity, consistency and delivery of policies that prioritise what is the challenge of our lifetime. The new government also needs to show its support for the private sector through investment incentives that will attract much-needed capital for the necessary renewables projects that will enable us to take charge of our energy security.”

David Bird, Investment Director of Octopus Renewables Infrastructure Trust, said: “We need to see a step change to speed up the shift to a low-cost clean energy system. To do this, we need to unblock the grid connection queue and streamline planning processes so renewable energy projects can come online quicker than ever before. Alongside this, we need to see an acceleration in the shift to electrification in sectors like heat and transport.

“Achieving a net zero power sector and decarbonising our electricity supply is a major investment opportunity. For the past decade or more, during which time there has been significant progress made towards this goal, renewable energy investment trusts have introduced billions of pounds of capital into the sector.”

Ross Grier, Chief Operating Officer of NextEnergy Capital, the investment adviser to NextEnergy Solar Fund, said: “To be truly successful we would like to see holistic thinking applied to the challenges faced by society in tackling the price, sustainability and security of energy supply. The current focus purely on price to consumer is short-sighted, and leads to a certain type of project (namely those of much larger scale) being the only ones that can be successful.”

James Armstrong, Managing Partner at Bluefield Partners, the investment adviser of Bluefield Solar Income Fund, said: “Investors need clarity and long-term stability. One way of creating this is to extend out the terms of Contracts for Difference (CfD) awards so as to cover the lifetime of energy projects. This will reduce the cost of capital, and therefore projects, meaning they can bid in to the auctions at a lower cost to the consumer.”

Paul Mason, Co-Manager of Harmony Energy Income Trust (HEIT) said: “Any policies or support specific to battery energy storage (BESS) would be welcome. As a non-subsidised asset class and considering that National Grid Electricity System Operator identifies BESS as a cost-efficient tool to help with the growing challenge of managing grid constraints on a national level (and therefore lowering costs for the consumer), one would expect BESS to continue to be exempt from any ‘windfall tax’ or other punitive policies.”

Managers’ views on manifestos

Jonathan Maxwell, CEO of SDCL, Investment Manager of SDCL Energy Efficiency Income Trust, said: “The Labour and Conservative manifestos need to go far beyond their current focus on households and go to where most energy is actually used, which is public buildings, industry, business and transport. The Liberal Democrats spend more time on this. However, all parties should start to commit to targets to reduce energy use per unit of GDP output by 2030.”

Ross Driver, Managing Director at Foresight Group and the Manager of Foresight Solar Fund, said: “We welcome Labour’s manifesto plans to harness Britain’s sun, wind, and wave power to make consumers’ bills cheaper and ensure the UK’s energy independence.”

Alex O’Cinneide, Chief Executive Officer of Gore Street Capital, the investment manager of Gore Street Energy Storage Fund, said: “It is good to see clean energy so high on the agenda in this election, with a clear choice between scale presented by the Labour and Conservative manifestos. Labour has pledged to deliver 90 GW of new wind and solar capacity by 2030 against the Conservatives’ paltry 30 GW of new offshore wind.

“I am encouraged that both main parties recognise the obstacles that exist in securing grid connections, but we need to see the details of how this problem will be overcome in the short term if the level of renewables deployment being pledged can be achieved.

“It is positive to see both Labour and the Liberal Democrats push for greater action within the financial sector to support credible transition plans in line with the Paris Agreement. Investment trusts have driven large-scale deployment of renewables for years, most recently under challenging market conditions. We need progressive action within the green finance space to deliver the decarbonisation we and future generations need to live in a clean and sustainable world.”

Dr JJ Traynor, Managing Partner of HydrogenOne Capital Growth, said: “The UK has ambitious decarbonisation targets, including plans to deliver 10GW of low-carbon hydrogen production by 2030. There is no shortage of planning in the UK to stimulate clean hydrogen supply, but surprisingly little thinking on how to stimulate demand. This risks leaving the UK at a disadvantage in attracting much-needed private capital for clean hydrogen.”

Tom Williams, Partner at Downing LLP, Investment Manager of Downing Renewables & Infrastructure, said: “The transition to net zero is the industrial revolution of our time and we are pleased that Labour understands this. Supporting the transition to net zero is an opportunity for growth, job creation and will help to reduce household bills, and we should embrace it wholeheartedly.

“The Conservative Party does recognise that the country simply has to make the transition to net zero (they retain the net zero by 2050 pledge). However, this Tory government has consistently failed to implement a coherent energy strategy or a pathway to net zero and has little credibility left.  In May 2024, for the second time in two years, the High Court ruled that the UK government’s climate strategy is not fit-for-purpose and falls far short of the credible plan required by law.

“The scrapping of net zero and related green subsidies is what we would expect from Reform. They have outlined a completely undeliverable policy with a politically motivated headline today in return for destitution tomorrow. The OBR produced a scenario of ‘unmitigated global warming’ in 2021 which showed UK public sector net debt rising to 300% of GDP by the end of the century. Not sure they care.”

How renewable energy investment trusts could support Labour’s clean energy plan

Richard Hulf, Managing Partner of HydrogenOne Capital Growth, said: “Whilst we support the ambitious targets to deliver clean energy by 2030, there is a lot of work to be done in order to deliver carbon neutrality by 2030. Investment trusts, such as HydrogenOne Capital Growth, could play a role in helping to achieve these targets by providing financing for clean tech companies and projects. However, in order to do so, the government should look carefully at the current discounted valuations of the investment trust sector and listen to the active campaign to address the misrepresentation of cost disclosures, which is one factor affecting sector demand and preventing investment trusts from raising further capital to invest into the energy transition.”

Ross Grier, Chief Operating Officer of NextEnergy Capital, the investment adviser to NextEnergy Solar Fund, said: "The next government should reinforce a robust policy commitment to delivering 70GW of solar power by 2035, with further growth beyond. Renewable energy investment trusts can help deliver a clean power system by 2030 with action to develop new grid infrastructure, maintain the UK’s international competitiveness, and protect investor confidence through electricity market reform. Solar and energy storage projects developed by companies such as NextEnergy Solar Fund will play a significant role in delivering secure, affordable and clean energy to the UK."

Tom Williams, Partner at Downing LLP, Investment Manager of Downing Renewables & Infrastructure, said: “The target is ambitious, as it has to be. In order to achieve it, Labour has to tackle the gating issues: grid capacity and planning. However, without clear guidance given to local planning authorities, we will continue with the triumph of nimbyism over national interest. Grid infrastructure upgrades have to be effected at pace and grid connections brought forward. It is going to be very hard to mobilise the billions needed to transform our energy landscape by 2030 if you can’t connect the projects until 2040.

“Renewable energy investment trusts have raised and deployed billions of pounds into renewable energy over the last decade. The government should think of them as very effective funders of their energy policy provided that they keep their end of the bargain: clear, consistent policy and backing up their words with action.”

Max Slade, Co-Manager of Harmony Energy Income Trust (HEIT), said: “HEIT has access to a significant pipeline of projects capable of connection between now and 2030, with more beyond that date. The ongoing reform in relation to grid connections should accelerate the delivery of these projects. Instead of focusing on the energy/renewables sector, the government needs to prioritise policies to encourage the reversal of the current outflows of capital from the investment trust sector. Due to the persistent discount to NAV at which its shares trade, HEIT does not currently have the ability to raise fresh equity to enable it to grow its portfolio and to support these clean energy targets. This is the more pressing issue.”

The impact of Labour’s clean energy plans, including Great British Energy

Jonathan Maxwell, CEO of SDCL, Investment Manager of SDCL Energy Efficiency Income Trust, said: “Great British Energy could be a catalytic investor and/or coinvestor in the market. It must ‘crowd in’ private capital from investment trusts and other markets, and not ‘crowd out’ private capital by dumping cheap money into projects with too much risk, which would distort the market.”

James Armstrong, Managing Partner at Bluefield Partners, the investment adviser of Bluefield Solar Income Fund, said: “We are encouraged by the ambition to make Britain a clean energy superpower, and to triple solar power by 2030. Signalling is important to investor confidence, but so is long-term, tangible policy to deliver those targets. 

“GB Energy has the potential to be a very positive addition to the country’s energy landscape,

so long as it acts a partner and an enabler and focuses on areas that can deliver the greatest long-term benefit to the system as a whole.”

Ross Driver, Managing Director at Foresight Group and the Manager of Foresight Solar Fund, said: “We are pleased that Labour wants to make the country a clean energy superpower by 2030 but call on the next government – whichever party that may be – to listen to the concerns of renewable infrastructure providers and ensure a clear, stable and internationally competitive method for electricity pricing. Policy consistency will go a long way to help grow renewable capacity.”

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Notes to editors

1. With total assets of £21 billion, the Renewable Energy Infrastructure sector is the third largest AIC sector by assets and its 21 investment trusts cover a broad range of renewable themes, from solar to wind, hydrogen power to battery storage. 
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