Press release

19 May 2020 London, GB

Renewable sector is expected to bounce back faster despite the short term impact of Covid-19

Despite the global slowdown due to Covid-19, the renewables industry is expected to bounce back faster as the long term drivers for renewables investment remain strong, according to the 55th EY Renewable Energy Country Attractiveness Index (RECAI).

Press contact
Adam Holden

Senior Manager, Media Relations, Ernst & Young LLP

Passionate media relations and public relations professional helping to provide insight and clarity to complex business issues. Husband and father to twin boys, and a golden retriever.

  • UK sets low carbon generation record and jumps from 7th – 6th place on the index
  • Renewables industry is potentially a safer-haven for long-term investment
  • Climate change and ESG considerations drive higher investment in renewables
  • The US and Spain have notably risen in the ranking, at #1 and #11 respectively

Despite the global slowdown due to Covid-19, the renewables industry is expected to bounce back faster as the long term drivers for renewables investment remain strong, according to the 55th EY Renewable Energy Country Attractiveness Index (RECAI). EY has created a temporary Covid-19 correction parameter to ensure the biannual index remains accurate and relevant in the current crisis and includes a combination of factors that reflect how resilient a country is to a pandemic – in health and economic terms.

UK jumps one place up the index and sets record for low carbon generation in April

The UK’s position on the index – moving from 7th to 6th place – has been buoyed by the UK Government’s decision to re-include onshore wind and solar projects in the next Contracts for Difference auction, encouraging greater and more diverse renewable energy development from Round 4 in 2021.

April saw coal account for less than 1% of electricity generation in the UK, with low-carbon sources accounting for around 57% - breaking a previous record set in June 2019. While the record is in part attributable to a dramatic drop in electricity demand due to the COVID-19 lockdown restrictions, a spike in solar generation on 20 April, accounted for almost 30% of UK electricity demand.

Ben Warren, EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor, says: “As demand for electricity has fallen, resulting in a drop in power prices, the next few months could be challenging for the renewables industry as it may struggle to compete on price with fossil fuel alternatives. However, the future looks bright for renewables. 

“While new renewable installations may well be down as much as 10% in 2020 compared to 2019 levels, there is an expectation that the industry will be more resilient than others, with some predicting a bounce back in 2021. Particularly if Government starts to provide more subsidies – reversing its move to a subsidy free environment – and corporates continue to support renewables with Power Purchase Agreements that help to provide security of revenue.”

ESG issues increasingly critical to future value creation

The report highlights how climate change and other key environmental, social and governance (ESG) issues are being increasingly recognised as critical determinants of a company’s future value creation potential. Institutional investors are demanding that businesses not only deliver financial performance, but also show how they make a positive contribution to society. As a result, firms have to re-evaluate their corporate strategies to curb their emissions, enhance their governance and improve their climate-related disclosures. This has resulted in institutional investors around the world increasing the volume of capital they are allocating to renewable energy infrastructure as a means to hedge their climate exposure, according to our analysis.

Warren adds: “There has been much discussion around ESG earlier this year and though it is currently eclipsed by Covid-19, it is still the dominating long-term driver for renewables investment coupled with climate change. Despite the adverse effect on health and economy, one of the few positive fallouts of the current crisis is how dramatically pollution levels have fallen through reduced fossil fuel consumption. A greater focus on resilience and a sustainable long-term energy future will work in favour of clean energy - notably wind and solar, together with storage.”

The US has secured the top position in the current rankings, the first time since 2016, largely because of a short-term extension to the Production Tax Credit and long-term growth in offshore wind, with plans to invest $57b to install up to 30GW by 2030. France has improved its rank to third position as it secured strong power prices for wind and solar developers in its latest auction awards for 1.4GW, to gradually wean its grid off nuclear power. Spain’s ranking has improved by 4 positions to 11 despite being hit hard by COVID-19, as climate and energy policy remains a high priority for the new coalition government. It has set out aggressive but achievable plans to increase wind and solar, and most investors remain positive about Spain’s medium-term prospects.

The report examines how large-scale energy storage is critical to decarbonise electricity systems, and the conditions needed to be in place to encourage investment in utility-scale battery storage. As electricity grids decarbonise, vast amounts of energy storage will be needed, and utilities and developers are slowly ramping up investments in large-scale batteries. 12.6GWh of battery storage is forecast by Wood Mackenzie to be installed this year, making 2020 a record year for energy storage growth while in the longer-term a 13-fold increase in capacity growth from around 17GWh currently to 230GWh by 2025 is anticipated. 

Benoit Laclau, EY Global Energy Leader, says:

“Despite the current crisis, this is a defining and transformative opportunity for the energy industry. Stakeholders are looking to invest and collaborate where climate change and sustainable development are deeply embedded in the company strategy. Energy leaders must realise this is a win-win situation – with the potential for disrupting the status quo - and take action towards investments in renewables and related sustainable long-term infrastructure: such as energy efficiency, smart power networks and low-carbon transport infrastructure.”

For the complete top 40 ranking, as well as an analysis of latest renewable energy developments across the world, visit