Political uncertainty and mixed messages over the UK's future energy supply have dropped the UK down to 13th in EY's (Ernst & Young) ranking of countries' attractiveness for investment in renewables.

The UK has ranked as high as second in previous issues of EY's Renewable Energy Country Attractiveness Index (RECAI) in the mid 2000s, but has been falling since. Last year the UK dropped out of the Top 10 for the first time and is continuing downwards in EY's measures of appeal to investors in renewable energy.

Speaking to Infrastructure Intelligence, EY Global Power & Utilities corporate finance leader Ben Warren said: "There is a whole bunch of analysis behind the RECAI report, but in essence for investors there are a lot of questions hanging over UK energy supply and government's view of renewables as not being cost-effective."

Continuing delay to the Hinkley Point C nuclear project has helped to highlight the UK's likely future deficit of energy supply, the RECAI report says. But rather than commit to further renewable sources, the UK government has opted for the Capacity Market option of guaranteeing energy suppliers a continuous revenue stream, in return for keeping their generators hooked up to the grid and available for supplying energy at all times. Winning bidders will be expected to invest in low carbon supply in return for gauranteed capacity payments. The first round of Capacity Market auctions which will take place later this year for supply from 2018/19.

Government's emphasis on the Capacity Market is sending out mixed signals,  Warren said. There is some good news for UK renewables, such as further rounds of negotiations on strike prices for large off-shore windfarms. The UK is currently the world's leading market for off-shore wind, according to Renewables UK. This contrasts with government's removal of subsidies for less costly solar and on-shore windpower.

"The whole government rhetoric is low cost energy for hard working families, but there is an apparent lack of willingness to discuss more widespread renewables," Warren said. "Goverment is backing relatively expensive nuclear and off-shore wind power. Both do not sit well with the rhetoric of low cost energy, or show evidence that costs can come down, as solar and on-shore wind have done but are no longer supported. This is all giving mixed messages to investors."