RECAI: Latest developments
China streamlines solar. After installing a record-breaking 12GW of solar capacity in 2013, China will be targeting 14GW this year and has ramped up consolidation efforts. In January, the Government published a list of 109 Chinese solar companies still eligible for domestic support, such as favorable financing terms and participation in public tenders, and state-owned electricity grid operators are now obliged to buy all available solar power or risk penalties.
India scales up. After a series of delays, phase two of India’s National Solar Mission attracted bids totaling 2,170MW, almost triple the 750MW on offer. This success is likely to boost support for plans to launch a similar program for wind which will target 100GW of capacity by 2022. Recent Government plans for a 5GW solar project in the Ladakh region further emphasize India’s renewable ambitions.
Mexico shake-up. A radical energy reform bill approved in late 2013 is expected to boost Mexico’s economy and increase international participation across the sector. It will also help create an independent grid operator and a competitive wholesale power market. These reforms, and a new carbon tax which took effect on 1 January, are expected to boost foreign and domestic investment into an already thriving renewables sector.
Australia risks derail. Government bills to repeal the carbon pricing legislation and the US$9b Clean Energy Finance Corporation were approved in the Lower House in November. The Government will also undertake a review of the Renewable Energy Target. Such developments will inevitably have a downward impact on investment as projects begin to be evaluated on the basis of raw economics, although recent analysis identifying Australia as a key grid parity market for wind and solar signal an attractive market in the long run.
Germany drops the axe. The long-awaited formation of a coalition government and proposals on how it intends to tackle rising energy costs have brought much-needed clarity to the German renewables market. However, it also brings capacity and subsidy reductions, as well as surcharge payments for self-consumption. The sector’s reaction has been stoical, but there is little doubt the proposed reforms will reduce the attractiveness of the German market.
UK in a spin. Government proposals to make mature renewable technologies compete for subsidy support under the new contracts for difference regime have thrown the UK market into a spin. Mixed policy signals on its long-term energy strategy continue to reduce investor confidence in the Government‘s commitment to a low-carbon energy future, while the mothballing of large-scale offshore wind projects has also caused concern.