RECAI: Latest developments
Egypt erupts. Egypt has revived efforts to generate at least 20% (around 12GW) of power from renewables by 2020 (up from 12%). The Government introduced relatively generous FITs in September 2014 for projects up to 50MW, and a tender in November to procure 2.3GW and 2GW of solar and wind power, respectively, via 20–25 year PPAs. Around 100 companies qualified as approved bidders in January 2015, with solar more than 50% oversubscribed.
India sparks surge. It seems the Indian Government’s ambitious target of 100GW solar capacity by 2022 is not unfounded, with commitments accelerating rapidly. US-based SunEdison is to develop a US$4b solar panel factory through a JV with Indian conglomerate Adani Enterprises, and more than 10GW of PV capacity over the next five years. Even state-owned Coal India Ltd. is to develop 1GW of domestic solar capacity, while the US Ex-IM bank has committed US$1b to clean energy projects. A 100MW offshore wind farm is also currently under development in Gujarat, the first step toward India’s goal of 1GW offshore wind capacity by 2020.
Mexico maps out. The Energy Transition Law, which policy-makers indicate is the final piece of Mexico’s long-term energy strategy, will be debated in the Senate. While other recent legislation has focused on liberalizing the oil and gas sectors, this will set out a detailed road map for achieving 35% clean energy by 2024 (up from 12%). The government also plans to attract US$14b of investment in 6.5GW of wind capacity by 2018, and introduce revised public consultation procedures to address indigenous communities’ blockading of wind projects.
Russia loses momentum. After a potentially transformative 18 months that saw the first renewable energy auctions and set a 6.2GW 2020 target, failure to meet even the relatively meager 35MW solar capacity target by the end of 2014, and disappointing interest in tender rounds for wind, suggest Russia will not become the next green giant any time soon. Combined with the impact of low oil prices and the Ukraine conflict on its investment climate, it looks like Russia might be slowing when it comes to renewable energy.
Saudi Arabia stalls again. In January KACRE said completion of its US$109b solar project, aiming to bring 41GW of capacity online by 2032, will be delayed by another eight years. Prospective investors and developers are already losing patience at the project’s painfully slow progress, despite the kingdom’s significant resource potential and ambitions to become a regional renewable energy technology exports hub, and this could prompt some to abandon the market for better options.
South Africa in grid jeopardy. Despite becoming a role model for large-scale energy procurement, concerns about future tender rounds under South Africa’s renewable energy IPP program are increasing following significant delays to the financial close of Round 3 projects in 2014, and state utility Eskom’s scaling back of its 10-year US$14.7b transmission development plan due to a lack of funding. Eskom has said it cannot invest in grid connections beyond Round 3 requirements, potentially jeopardizing Rounds 4 and 5 of the current program, and the additional 3.2GW targeted for 2016–2020.
New clean energy investment worldwide, 2014
A series of large-scale offshore wind financings and a surge in demand for large-scale and rooftop solar helped total new clean energy investment reach US$310b in 2014, a 16% increase on 2013, and just shy of 2011’s record high of US$318b.
Investment in small distributed capacity, primarily rooftop solar, soared 34% to US$74b, while new equity raised for clean energy companies on public markets hit a seven-year high at US$19b, largely due to a number of high-profile yieldco listings. However, ongoing policy uncertainty in 2014, particularly in key European markets, could see fewer new investments in 2015.