RECAI: Index highlights

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RECAI scores and rankings at February 2014

Renewable Energy Country Attractiveness Index 39 - November 2013

Index highlights

Solar savvy. An adjustment to the technology weightings to reflect solar’s increasing importance in the global energy mix has generated significant movement, helping to boost the rankings of countries across Southern Europe, Latin America, Asia and the Middle East, while those in Northern Europe, particularly the Nordics, have slipped down.

After a booming 2013, which saw 7GW of new renewable capacity deployed, Japan has replaced the UK in fourth place. While the return of the nuclear debate and grid constraints signal future challenges, increased investment in storage and transmission, and signs of a thriving offshore sector have boosted the medium-term outlook.

The UK falls to fifth place, as prolonged policy uncertainty is replaced with the unwelcome news that mature technologies must compete for contracts for differences (CfDs) from day one, and a series of project cancellations spell trouble for offshore wind.

India has jumped to sixth place, with recovery and growth expected after a weak 2013. Ambitious targets, large-scale project announcements, and a series of national and state auctions are creating a robust pipeline.

Australia drops to eighth place, with the Government’s move to repeal carbon pricing and review the Renewable Energy Target creating uncertainty.

France has also fallen two places, with a weakened macroeconomic climate — reflected by a downgraded sovereign credit rating — and yet more energy market consultations decreasing the likelihood of a comprehensive renewable energy policy reform any time soon.

Canada has moved up to sixth place, with a bill to drop domestic content requirements in Ontario, and a call for tenders for 450MW of wind farms in Quebec, helping to boost the market’s attractiveness.

Large-scale capacity tenders in late 2013 have helped push Brazil and South Africa up to 12th and 19th places respectively. The third round of South Africa’s procurement program was almost 2.5 times oversubscribed, while December saw Brazil’s first solar-only auction opening up this previously untapped market.

Severe policy measures in Spain continue to deter investors, but the completion of its first unsubsidized utility-scale solar plant could spark a revival in the sector. This, and some traction in the offshore wind sector, has boosted it up one place.

Mexico has jumped three places, with extensive power reforms in late December expected to increase foreign investment and competition. An improved sovereign credit rating also indicates a more buoyant macroeconomic outlook.

The US and China retain their positions at the top, though the score gap has narrowed significantly. China’s consolidation program is already prompting recovery in the solar sector, while in the US, congressional gridlock, cheap shale gas and lapsed clean-energy credits have cast doubt on Obama’s renewed green agenda.

Germany retains third place but has lost critical points. Recently announced revisions to renewables subsidies, though providing much-awaited clarity, signal tougher times ahead.