An exploratory investigation of barriers and enablers affecting investment in renewable companies and technologies in the UK

Abstract

The last few years have seen considerable research expenditure on renewable fuel technologies. However, in many cases, the necessary sustained and longterm funding from the investment community has not been realized at a level needed to allow technologies to become reality. According to global consulting firm Deloitte's recent renewable energy report (http://www.deloitte. com/energypredictions2012), many renewable energy projects stalled or were not completed because of issues including the global economy, the state of government finances, difficulties in funding and regulatory uncertainty. This investigation concentrates on the funding aspect and explores the perceived barriers and enablers to renewable technologies within the investment and renewables community. Thematic analysis of 14 in-depth interviews with representatives from renewable energy producers, banks and investment companies identified key factors affecting the psychology of investor behaviour in renewables. Eight key issues are highlighted, including a range of barriers and enablers, the role of the government, balance between cost/risk, value/return on investment, investment time scales, personality/ individual differences of investors and the level of innovation in the renewable technology. It was particularly notable that in the findings the role of the government was discussed more than other themes and generally in quite critical terms, highlighting the need to ensure consistency in government funding and policy and a greater understanding of how government decisionmaking happens. Specific findings such as these illustrate the value of crossing disciplinary boundaries and highlight potential further research. Behavioural science and economic psychology in particular have much to offer at the interface of other disciplines such as political science and financial economics.

A Scoping Review of Barriers to Investment in Climate Change Solutions

“…However, we do note that some issues may have been missed in this way and we recommend that further more detailed searches around particular themes/code words may be needed to expand our findings in future research. For example, the issue of fiduciary duty only came up in one of our papers [43], but it is explored in more detail in a related research field-that of Socially Responsible Investment (SRI) [44,45].…”

UK Macro-Algae Biofuels: A Strategic Management Review and Future Research Agenda

“…To support the development of an emerging biofuel technology in a sustainable manner, particularly with the case of macro-algae, policy support must be carefully considered. In addition, research [84] highlights the need for stability and longevity in any government financial support for renewables technologies but also that there is little agreement in the industry over the use of subsidies. Clarity of guidance is also required for successful applications for marine licenses for seaweed farming [77].…”

“…Although investment in renewables has increased significantly to US$285.9 bn (£202.3 bn) in 2015 [82], the government still has an important role in facilitating investment to make it easier for projects to secure funding [81]. Indeed, much research shows that the stability and consistency of government policy, especially within changing political environments, with regards any renewable technology can greatly affect the level of investment in renewables [8,20,83,84].…”

Biofuels, science and society

“…Such uncertainty is a particular difficulty for investors in biofuel technologies and, in their article, Wells et al [14] report on interviews, and research within the investment community and with established and new renewable energy start-ups, to directly assess some of the barriers present. In many cases, the necessary sustained and long-term funding from the investment community has not been realized at a level needed to allow technologies to become reality.…”

“…According to global consulting firm Deloitte's [15] recent renewable energy report, many renewable energy projects stalled or were not completed, because of issues including the global economy, the state of government finances, difficulties in funding and regulatory uncertainty. Wells et al [14] identify eight key issues, including a range of barriers and enablers, the role of the government, balance between cost/ risk, value/return on investment, investment timescales, personality/individual differences of investors and the level of innovation in the renewable technology. It was particularly notable that in the findings the role of the government was discussed more than other themes and generally in quite critical terms, highlighting the need to ensure consistency and longevity in government funding and policy and a greater understanding of how government decision-making happens.…”