Proactive risk mitigation, the creation of strategic partnerships and more considered policy-making will help the renewables industry maximize developed and emerging market opportunities.
Renewable energy country attractiveness index
Established in 2003, our global quarterly publication ranks 40 countries on the attractiveness of their renewable energy investment and deployment opportunities, based on a number of macro, energy market and technology-specific indicators.
Far from being in crisis, US clean energy deployment and investment opportunities are growing as energy market dynamics change and new sources of capital appear.
Covering the gap: political risk insurance
Domestic content: handle with care
Mining green to strike gold
The gap has narrowed again between the US and China. The US still has significant deployment and investment opportunities, but overwhelming capacity forecasts in China and signs of a less centralized approach that could improve access for private investors, increase the likelihood of a challenge for the top spot.
Japan and India look poised to overtake their closest index rivals, yet their significant investment potential is being hampered in the short term. Japan’s recent national energy plan has created mixed signals over its long-term energy strategy, while high financing costs and a subsidy backlog are jeopardizing project bankability in India.
The Philippines and Indonesia have entered the index, with ambitious renewables targets, stable incentive regimes and high energy demand from a large and growing population.
Best of the rest
Mixed fortunes have kept Germany in third place, while the prospect of solar market reforms have sparked more uncertainty for developers and investors in the UK, pushing it down to sixth, below Canada.
Strong capacity forecasts and approval of a new wind feed-in tariff regime have helped France up to eighth place, above Australia, where potential cancellation of its Renewable Energy Target is slowing investment.
Brazil, Chile and South Africa have continued to climb, with Brazil now in the index top 10. Structured offtake mechanisms in Brazil and South Africa continue to secure significant capacity through competitive bidding, while more large-scale projects and a proposed carbon tax have boosted Chile’s ranking.
High electricity prices, strong project pipelines and planned capacity auctions have taken Turkey and Mexico up to 20th and 25th places, respectively.
The US$870m financing of the 300MW Lake Turkana project has helped move Kenya up to 37th place, while the apparent collapse of a UK-Ireland energy export pact has dramatically reduced Ireland’s short-term wind prospects.
In and out
Low investment and failure to recover from severe policy measures have dropped the Czech Republic, Bulgaria and Slovenia out of the index, enabling Russia’s capacity procurement program, ambitious targets, and potential for scale to push it into the top 40.
Mexico has jumped three places thanks to energy market reforms that are expected to boost competition and economic growth.
Market to watch
Efforts to liberalize its power sector and an energy imperative prompted by gas shortages and a population of almost 170 million have brought Nigeria into view as a long-term renewable energy growth prospect. There are currently significant barriers – not least its political climate – but an energy transformation will almost certainly happen here – it’s just a question of when.