Earlier this year the U.S. was recognized as the most attractive place for renewable energy development, according to Ernst & Young’s Renewable Energy Country Attractiveness Index. China was second. Both retain their rankings in the latest version of the index which came out earlier this week. The index evaluates all the factors that make a country a good place to pursue wind, solar or other renewable energy projects. But there were some shakeups elsewhere in the top 10. The United Kingdom became fourth most attractive, jumping up two spots, Japan became fifth and Australia slipping two places to sixth.
The U.S. led the index based on its plans to expand clean energy. “Measures set out in Obama’s Climate Action Plan include an additional 10GW of renewable energy projects on public lands by 2020 and increasing the renewables share of federal power procurement from 7.5 percent to 20 percent by 2020. It also reaffirmed the need to increase the FY14 budget for clean energy R&D by 30 percent to US$7.9 billion,” the index said. It also said the U.S. has issued two off-shore auctions for wind projects.
China was second for a number of reasons, the government pushed to allow companies to reorganize using tax breaks to support mergers and acquisitions. “It also increased its 2015 domestic solar target by 67 percent to 35 gigawatts and is promoting market competition through consolidation and overseas investment,” Ernst & Young said.
The U.K. jumped up in the index after releasing the proposed for its new contract for difference (CfD) mechanism. The country received requests for 18 gigawatts of projects under the “final investment decision” program, which will qualify some large-scale projects for CfDs before electricity market reform becomes law.
While the U.K. jumped up in the index, most of Europe has been backsliding somewhat. For instance, “Reactive subsidy cuts, in countries such as Czech Republic, Italy and Greece, [are] severely impacting project revenue streams and contributing to a slow-down in the pace of investment and deployment across the region.”
“While we’re not seeing a withdrawal of investors from Europe, changing levels of financial incentives for renewable energy projects has slowed the investment pipeline,” said EY Global Cleantech Leader Gil Forer. “However, activity isn’t slowing everywhere. Investors are considering new markets with booming energy demand and an abundance of natural resources such as East Africa, Asia, Latin America to energize their portfolio.”
The index anticipates strong continued growth in some other markets as in South Africa where public-private partnerships are leading the way and, according to EY, is a key case study for such partnerships. Under the programs there the competition has helped set the tariff price. “In a world of constrained government balance sheets and a growing need to secure energy supplies, PPPs are quickly becoming one of the most effective ways for policy makers to stimulate long-term investment and sustainable renewable energy deployment,” said Ben Warren, EY Global Cleantech Transactions leader said.