China on the charge
Heavy renewables investment pays off
LONDON, MOSCOW, 8 June 2010 – China is now tied with America as the most attractive location in which to invest in renewable energy projects, according to Ernst & Young’s latest Renewable Energy Country Attractiveness Indices.
China has climbed two points in the indices, having invested a total of US$34.6b into its clean energy projects last year – almost double the US – and has emerged as the world’s market leader in installed wind power capacity in 2009. Meanwhile, the US has dropped a point to the increasing likelihood that the much awaited climate and clean energy bill will not be passed before the November mid-term elections.
Ben Warren, Ernst & Young’s Environment and Energy Infrastructure Advisory Leader, explains, “China’s consistently strong performance underlines its determination to robustly align energy and industrial policy as it seeks to build a dominant position in the global market for technology manufacture and supply.”
Ben Warren added: “The story in the European markets is not quite as rosy. A number of economies are struggling to balance the books, not just in terms of national debt deficits, but also in terms of justifying the cost supporting renewable energy deployment.
“However, the EU’s recent announcement that it intends to set emissions reductions targets of 30% of 1990 levels by 2020 shows a firm commitment by European policy setters to continue to take a leadership position in the race for delivering low carbon economies. There will doubtless be increased stress between the drive to decarbonise and the financial resources available to deliver. However, such an ambitious commitment at the EU level, if indeed adopted and enforced by Member States, should result in a European surge up the index in the medium term.”
The indices also see the UK receive a two point rise following government plans to launch a £2b “Green Investment Bank” fund, and approval for a £1b upgrade to the UK’s electricity network to boost renewable energy integration.
India has risen by two points following the government’s injection of more than US$1b into the ‘green economy’ and the unveiling of plans for up to 4GW of wind capacity and 1GW of solar power to be installed in the short to medium term.
Greece, Spain and Portugal have all suffered negative score changes due to worsening capital markets and a downwards revision of sovereign credit ratings by S&P. The first few months of 2010 was also a difficult period for Australia, dropping two points following the delay in the planned emission trading scheme until after 2012.
“Although Russia did not appear among the top attractive investment locations, it remains a country with great potential for renewable energy development, ― says Alexey Loza, partner with Ernst & Young, CIS Energy, Chemicals and Utilities Leader. ― Development of renewable energy will be driven by market demand, enhancement of legislation and overall improvement of the investment climate. With over 17 million square kilometers of land, Russia is well positioned to tap into wind, hydro, geothermal and solar sources of energy.”
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
Ernst & Young expands its services and resources in accordance with clients’ needs throughout the CIS. 3,400 professionals work at 16 offices throughout the CIS in Moscow, St. Petersburg, Novosibirsk, Ekaterinburg, Togliatti, Yuzhno-Sakhalinsk, Almaty, Astana, Atyrau, Baku, Kyiv, Donetsk, Tashkent, Tbilisi, Yerevan, and Minsk.
For more information, please visit www.ey.com.