China and India overtake US at top of renewable energy attractiveness index
China and India have surpassed the US at the top of the latest EY Renewable energy country attractiveness index (RECAI). The fall – the first for the US since 2015 – to third in the ranking of the top 40 countries follows a marked shift in US policy under the new administration. The report identifies the US Government’s executive orders to rollback many of the past administration’s climate change policies, revive the US coal industry and review the US Clean Power Plan as key downward pressures on renewable investment attractiveness. Ben Warren, EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor, says:
“Movements in the index illustrate the influence of policy on renewable energy investment and development – both productive and detrimental. Supportive policy and a long-term vision are critical to achieving a clean energy future.” In China, the National Energy Administration (NEA) announced in January 2017 that it will spend US$363b developing renewable power capacity by 2020. This investment will see renewables account for half of all new generating capacity and create 13 million jobs, according to the NEA plan.
China also plans to launch a pilot tradable green certificate program in July 2017 for project operators to prove they have generated clean power and sell to consumers. The country has also committed to cutting greenhouse gas emissions by 18% per unit of economic growth by 2020 under the Paris Agreement. India continued its upward trend in the index to second position with the Government’s program to build 175GW in renewable energy generation by 2022 and to have renewable energy account for 40% of installed capacity by 2040. The country has added more than 10GW of solar capacity in the last three years – starting from a low base of 2.6GW in 2014.
Warren says: “The renewable energy industry is beginning to break free of the shackles that have stalled progress in the past. More refined technology, lower costs and advances in battery storage are enabling more widespread investment and adoption of clean energy.” Economically viable renewable energy alternatives coupled with security of supply concerns are encouraging more countries to support a clean energy future. Kazakhstan (37), Panama (38) and the Dominican Republic (39) have all entered the index for the first time. For the complete top 40 ranking and insight on battery storage, offshore wind and rooftop solar developments, visit ey.com/recai.