The U.S. is expected to install 41 gigawatts of solar power and 56 gigawatts of wind power by the end of 2021. That’s enough to keep the country on top of the pile for EY’s RECAI (Renewable energy country attractiveness index) report. But throughout much of the rest of the index, which saw a refresh of how EY evaluates countries for the index, many countries saw a change in ranking.
China and India retained their respective second and third spots on the index. The report attributed theirs and U.S.’s ability to remain atop to the size and scale of renewables activity. In particular it attributed the U.S.’s extension of federal production and investment tax credits for wind and solar, which will result in an additional 18 gigawatts of renewable energy installed throughout the country. That’s despite uncertainty over whether the Clean Power Plan will ultimately be implemented.
Under the new ranking methodology macro fundamentals, energy imperative, policy enablement, project delivery and technology potential made up the “pillars of attractiveness in our refreshed RECAI,” explained EY Global Power & Utilities Corporate Finance Leader Ben Warren.
Warren added: “They are the key drivers of deployment and investment opportunities in a new world order where renewable energy has moved beyond decarbonization. It is, quite simply, what makes most sense.”
The newest index, out earlier in May, showed that a lot is changing in how attractive countries are for renewable energy investments. In the new rankings european markets slipped while markets Latin America, Africa and Asia rose. The report observed that european markets are scaling back renewable energy ambitions as they figure out how to bring in more renewable in markets dominated by centralized electric generation.
“Emerging markets are transforming their energy industries at an unprecedented pace. Last year, renewable energy investments in the developing world overtook those in the developed world for the first time. Latin America, in particular, has become something of a litmus test for how quickly markets can grow,” Warren said.
The report highlighted Chile as a market where renewable energy is an economically viable competitor with all other energy sources. Its northern neighbor, Brazil is showing resilience in renewables despite its economic downturn. “Its underdeveloped solar market remains a potentially lucrative lure,” EY said. “Mexico’s recent power auctions have opened the door to multi-billion dollar opportunities under a new liberalized energy market,” the firm added.
“Markets earlier in their renewables journey are benefiting from cheaper and more efficient technologies, lower cost of capital and more reliable resource forecasting,” Warren explained. “The increasingly global flow of capital proves that investors are becoming more comfortable with new markets,” he added.Tweet