All renewables index
China remains at the top of the All renewables index for another quarter, with 70 points. Approval rules for new wind energy projects were tightened as it looks to manage sector growth more closely. New wind farm construction must now be endorsed by the National Energy Administration in Beijing before provincial authorities can givethe go-ahead. China also increased subsidy levels for small hydro plants, and is looking to Iceland for expertise in geothermal technologies as it rolls out a five-year US$10b (€7b) district heating plan.
In the US the production tax credit system will expire at the end of 2012, which is likely to cause a growth decline in the wind sector. There has also been a decline in investor confidence in solar following the bankruptcy of three major manufacturers. The national loan guarantee program recently expired, and it is uncertainwhether it will be renewed. As a result, the US drops one point to 66 in the index, putting it four points behind China and one ahead of Germany.
Germany's state-owned development bank, KfW, is to provide more than €100b of funding over the next five years to ease transition from nuclear to renewable energy sources. In contrast to many European countries with reduced scores, this news has taken Germany up a point in the index to 65, putting it just one point behind the USA.
India's renewable energy credit market surged through Q3, and by late October RECs were selling for double the Government's floor price. In August, the regulator extended the floor price of INR1,500 (€22) to March 2017 to help create market certainty. This increased activity is probably evidence of the market's concern over future energy price increases, estimated at up to 18% next year. These signs are fueling interest in power-saving technology, and will probably support India's goal of 15% of green electricity by 2020. It increases one point to 63 in the index.
In the UK, there was disappointing news on subsidies. Firstly, the provisional ROC banding proposals were released, and include reductions form 2015-16 onward for most technologies. Secondly, the solar FIT has provisionally been reduced by 55% to £0.21/kWh (€0.24/kWh) for installations of less than 4kW. This has dented investor confidence, and the UK lost an index point, putting it sixth below Italy. There was good news though that Scottish Power plans to invest £3b (€3.5b) to upgrade its high-voltage transmission electricity network in Scotland over the next 10 years, connecting up to 5GW of renewable energy to the grid.
France drops a point to 55, though stays in 7th place. New rules will make getting wind permits significantly slower – it could now take up to eight years to secure permits, in contrast to four-and-a-half years average elsewhere in Europe.
Brazil increases one point and moves up a place to 10th, on the back of successful power auctions for wind and other renewables at which it became apparent, for the first time, that the price of wind power has dropped below that of electricity generated by natural gas.
Australia stays in 12thplace, despite new planning rules in Victoria state that give landowners more say and restrict potential wind sites, which could result in a loss of more than US$3.1b (€2.3) in investment.
Romania continues to climb up the index, moving from 16th to 13th place following the passing of a new law increasing green certificates for renewable technologies, and creating one of Europe's most favorable incentive schemes.
Denmark increases one point and moves up two places to 19th. It is the first to set out a clear plan and timetable for ensuring 50% of its energy needs are satisfied by renewable energies by 2020, and 100% by 2050, with a focus on significant offshore wind expansion.
The South African Government continues to make progress with its competitive bidding process for renewable energy capacity, to replace the FIT scheme. There has been a large response to the tender for the first 3.7GW of RES capacity, due by 2016, with price caps set at attractively high levels. The tender is expected to attract investment of US$10-US$12b (€7- €9b). South Africa increases a point and three places to 23rd.
There has been a severe slowdown for renewable energy in Egypt because of political turmoil and lack of parliament, and it drops one point and a place to 27th.
Ukraine enters in 32nd place with impressive resources (especially with respect to wind), a range of tax exemptions, and a target of generating 19% of energy from RES by 2030. It will, however, need to address complex permitting procedures and an inadequate grid first.
Tunisia and Israel both have great potential for solar, while the wind-rich Patagonia region in southern Argentina represents a great natural resource.
Hungary boasts strong biomass resources compared with other European countries, and had installed 378MW as at the end of 2010. However, to maximize potential wind and solar resources it needs a more effective support mechanism, a stronger grid, and a simpler permitting process.