UK stabilises top 10 ranking for renewable attractiveness
The UK has cemented its position in the top 10 rankings of the world's most attractive countries for renewable energy investment, with China claiming top spot.
The bi-annual Renewable Energy Country Attractiveness Index from EY highlighted the UK’s recent Contract for Difference (CfD) auction which awarded 11 contracts to offshore wind, energy-from-waste and biomass projects. The results saw offshore wind become cheaper than nuclear energy, as a record low-strike price of £57.50 per MWh meant that costs have halved over the last two years.
“These results continue a trend of dramatic cost reduction in offshore wind across Europe,” said EY Global Power & Utilities corporate finance leader Ben Warren. “Auctions held in Germany and the Netherlands have seen similar price falls.”
The UK has maintained its tenth position from the last index, thanks partly to last month’s opening of the country’s first subsidy-free solar farm. The 10MW farm in Clayhill, Bedfordshire, co-located with a 6MW battery storage facility was developed after the Renewables Obligation (RO) scheme had closed to new applicants. Warren said that the Clayhill project demonstrates that solar energy has a “strong future” as a commercially viable technology.
Elsewhere on the index, China has held onto top spot after surpassing the US earlier in the year. China has committed to spending $363bn on renewable power capacity by 2020, helping to create 13 million new jobs. This forms part of a wider low-carbon transition which will see China start to phase out diesel vehicles in two years time.
EY notes that India, which plans to build 175GW on renewable energy generation by 2022, is in danger of losing second spot after cancellations to wind energy power purchase agreements (PPAs) and steep falls in tariffs bids in recent auctions.
The US remains in third place following executive orders to stimulate growth in the US coal industry and review the US Clean Power Plan. Its standing is also impacted by the US International Trade Commission’s (ITC’s) recent preliminary ruling which stated that increased imports of solar panels could cause “serious industry” to the domestic market.
Meanwhile, a surge in renewables activity and a series of policy developments, financial deals and tenders in the region has seen Middle East and North African countries such as Egypt, Saudi Arabia and Algeria move up the index.
France has risen two places to sixth spot, with new tenders and acquisitions combining with strong political support for renewables from President Macron. And South Korea has jumped up four places after newly appointed President Moon’s announced plans to increase the share of renewables from 6.6% to 20% by 2030.
Warren said that the index shows that government policy is “pivotal” in driving renewable energy development globally.
“As it becomes increasingly clear that time is running out for legacy energy supply models, countries are vying for their place in a clean energy future,” Warren said. “Collaboration with existing suppliers and innovative partners holds the key to success in this new world.”