By James Noble
November 27, 2013
US and China are the top two most attractive global locations to invest in renewable energy projects, according to Ernst & Young’s latest global renewable energy country attractiveness index. Rounding out the top five are Germany, the UK and Japan.
The US and China have maintained their top rankings since 2009, with other countries moving in and out of the top five, often attributed to a lack of political will rather than ineffective policy measures. Political posturing, ideological rigidity and election uncertainty often lead to boom-bust cycles for the clean energy sector. Both the UK and Germany, for example, currently appear stalled, with national politics hampering the development of clear strategies. This lack of clarity creates uncertainty and deters investment.
EY’s attractiveness index ranks countries according to their desirability as locations for investing in renewable energy technologies including wind, solar, biomass and geothermal power. This desirability is determined by ranking national renewable energy markets, renewable energy infrastructures and their suitability for individual technologies.
The index also saw advances for both South Korea, which moved up from rank No. 12 to 10 and Brazil, which rose by one slot to rank No. 14, due to the country’s large investments into wind and solar energy through government auctions for contracts. South Korea’s energy outlook has improved thanks to increases in the country’s wind and solar energy forecasts, triggered by nuclear shutdowns and an ambitious emissions trading scheme under development. Brazil's average wind prices of less than $50/MWh is welcome news to the fledging solar sector, as more than 150 companies have entered the market in anticipation of a solar boom.
France and Canada have jockeyed back and forth in the rankings between seventh and eighth place, with both announcing new support regimes for tidal power projects. France secured the higher ranking with the introduction of a carbon tax and a cap on nuclear-power capacity next year as part of its much-awaited energy transition law. Nevertheless, Canada’s province of Nova Scotia has helped to secure the country’s eighth place ranking with a proposed feed-in-tariff (FIT) program and specific approvals process for large-scale tidal power projects as part of its goal to develop 300 MW by 2022. Rates have not yet been announced but the scheme would complement the existing community FIT for small-scale tidal projects receiving $652 MWh.