China held top spot for the third time in a row and the United States regained second place in the twice-annual ranking of countries’ attractiveness for renewable energy investment, released yesterday by London-based accountancy Ernst & Young.
“While the current economic climate has driven a relentless focus on costs, that focus is paying dividends, with the global cost of electricity from renewable sources falling year-on-year,” said Ben Warren, chief editor of the Renewable Energy Country Attractiveness Index (RECAI). “Combined with the plunging cost of battery technology, we anticipate further rapid growth of the evolving renewable energy sector in the coming years.”
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China continues to lead in the ranking of the world’s top 40 renewable energy markets, despite its continuing high greenhouse gas emissions and dependence on coal. That’s partly because the country “has emerged as a global leader in solar generation,” EcoWatch notes. “Last July, the nation exceeded the government’s 2020 goal of 105 gigawatts of total solar PV capacity, an amazing feat considering how it only had 100 megawatts of solar PV capacity installed a decade ago. China hit 130 gigawatts of total solar capacity in 2017, making up 32.4% of all installed capacity globally.”
The U.S. and Germany both “leapfrogged” past the previous second-place finisher, the publication adds, after “India’s threat of a 70% tariff on imported solar panels and low power bids sparked ‘investor concerns’ regarding its ‘over-ambitious’ 2022 solar power goals.”
Although this aspect of the analysis was largely absent from the immediate news coverage, the RECAI also tracked growing interest in renewable energy on the part of large fossil companies, with Eni, BP, Statoil, Total, and Shell all scoring notable investments.
“Over recent months, several of the world’s largest oil companies have acquired a variety of companies and projects that have nothing to do with extracting, refining, or distributing hydrocarbons—but that are set to thrive in the low-carbon transition,” the report states.
“We’ve been here before,” Ernst & Young notes, when BP rebranded itself “Beyond Petroleum” in 2005, only to exit the field and write off much of its investment in solar, wind, biofuels, and carbon capture.
“So, what’s different this time?” E&Y asks. “Growing concern about climate change—from society in general, and from long-term shareholders in particular—has forced oil companies to think about the implications of a transition to a low-carbon economy. Motivations include concerns about future demand for transport fuels, growth opportunities in low-carbon technologies, and diversifying into power generation to secure demand for natural gas.”
In the previous edition of the RECAI, Donald Trump’s energy policies were enough to drop the United States into third place in the rankings. But Ernst & Young concluded that markets largely absorbed the impacts of Trump’s solar tariffs, while wind energy projects escaped subsidy cuts under the country’s recent tax bill.
“Solar import tariffs imposed by the U.S. government in January are likely to have only a limited impact on solar energy development in the country, but are likely to tip the scales toward wind projects at the utility scale,” the RECAI stated. “The solar tariffs — which are to be challenged under World Trade Organization rules — are neither expected to seriously derail U.S. solar investment, nor encourage much, if any, shifting of solar manufacturing back to the U.S.”
Canada placed 14th in the RECAI ranking.
