The US is still the world’s most attractive market for renewable energy investments. That’s according to the bi-annual EY Renewable energy country attractiveness index (RECAI), which found that the top five most attractive countries to invest in for renewable energy remain the US, China, India, Chile and Germany, in that order.
In the US many large businesses are starting to buy energy directly from clean power projects through power purchase agreements (PPAs). The index observed that companies including Google, Walmart, Facebook and HSBC have created a new way of buying renewable power. “Some 3.2GW of corporate PPAs were signed in 2015 in the US alone, against 500MW in 2012 — and the approach has spread globally,” the index stated.
“Sixty-five percent of the proceeds of green bonds sold since the market’s inception in 2007—or $95.6 billion—have been channeled to renewable energy. As of July 2016, $48.2 billion of green bonds had already been sold this year, compared to total full-year amounts of $41.8 billion in 2015 and $36.6 billion in 2014,” explained EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor Ben Warren.
While the top five in the index remained the same, the report observed that a number of other European countries moved up in its ranking of the top 40 global markets for renewable energy. Some of them had previously fallen in the rankings as emerging markets crept up in the May 2016 edition of the report.
“European countries lack the flexibility that exists in emerging markets to transform their energy industries,” Warren said. “Their greatest hurdle is integrating renewables with historically centralized conventional power generation. It began to look like European countries were scaling back their renewables ambitions as a result but, in recent months, we’ve seen promising new programs materialize around the continent.”
For instance, France moved up to 7th place in the rankings. The ratings and analysis company said France’s plan to auction 3 gigawatts of new solar capacity over the next three years helped it moved up. In addition, the country plans to build a factory to produce solar panels that will pave 1,000 kilometers of road in the country. Other European countries also moved up in the rankings, including Belgium, Sweden, Ireland, Norway and Finland. The report index also observed that work on a $2.3 billion undersea tunnel between Norway and Germany will offer a new wind-hydro energy storage opportunity between the countries.
The only European nation that fell significantly in the rankings was the United Kingdom. It fell to an all-time index low in 14th position, according to the index. “The United Kingdom’s vote to leave the European Union, the dismantling of the Department of Energy & Climate Change (DECC) and approval of the Hinkley Point C nuclear power station all contributed to a loss of appeal in the eyes of investors,” EY said.
“The green bond market is enabling corporates, banks and development finance institutions to tap into enormous demand among investors for clean energy projects. In the last few years, we’ve seen significant growth in green bonds sold by issuers with plans to direct proceeds to environmental ends,” Warren said.Tweet