THE BEST COUNTRIES NOW FOR NEW ENERGY

Political support and clear policies prove critical to renewable energy market growth, says Ernst & Young

August 2012 (Ernst & Young)

“Having quadrupled its solar capacity target to 50GW by 2020 and began an accelerated domestic installations program to tackle the oversupply of solar panels, China looks set to continue its domination of the global renewable energy market, according to Ernst & Young’s latest quarterly global renewable energy Country Attractiveness Indices report (CAI)…[China challenges now are] the oversupply of wind turbines and solar panels and resolving grid transmission issues…

“Despite dropping half a point, the UK has risen to fifth place…due to a fall in Italy’s ranking in response to worsening economic conditions…[but a] number of UK policy and subsidy announcements…[made during Q2 2012] have fallen short of delivering certainty for investors……[C]ontinued uncertainty regards the extension of the PTC in the US, and Germany’s introduction of a new roof-top PV tariff (to both deliver its ambitious renewable goals as well as revive a flagging domestic PV industry) put these markets on level pegging in second spot. In fourth place, India recently suffered severe blackouts leading to speculation that the country has attracted insufficient private investment to modernise its power infrastructure…”

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“Q2 2012 saw total new investment in the sector of US $59.6b (€48b), up 24% from Q1 2012, with China experiencing a 92% increase on Q1 2012. Europe and the US saw an increase in total new investment of 11% and 18% respectively in Q2 2012, the majority of which was driven by new build asset finance. While the number of deals remained broadly the same, the value of these transactions increased by around 40%–50% across the two regions…

“Challenging market conditions were reflected in a 50% decline in the value of renewable energy deals in Q2 2012 versus the previous quarter. Most transaction activity reflected the continued consolidation of the market, which is almost inevitable given the competitive landscape, compressed prices and tightening in demand…”

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