LONDON: A new report released by Ernst & Young, the Renewable Energy Country Attractiveness Index (RECAI), brings India and France up to 5th and 7th positions behind leaders China and US, underscoring the importance of collaboration between the public and private sector in driving low carbon growth.
The RECAI index is a quarterly publication which ranks 40 countries all over the world based on international market trends, national policies and investment in the renewable industry. China tops the index, followed by US, Germany, Japan, India, Canada, France and the UK.
Image courtesy: Renewable Energy Country Attractiveness Index, March 2015, EY
While the drop in oil prices has helped prove the stability of the renewable sector and cost-competitiveness of both the solar and wind industries, the RECAI authors stress this oversimplifies the already fast-growing low carbon energy transition.
Mark Kenber, CEO, The Climate Group comments: “Today the global low carbon economy is worth an impressive US$5 trillion. And it grew on average 11.8% per year in 2007-2010, compared to only 2.4% for the global economy as a whole. Clean technology is commercially viable and ready for scale-up.
“Inevitably, economies that moved early are now leading the way. China is the world’s biggest investor in clean energy, spending a record US$89.5 billion last year to account for almost 29% of the world’s total renewables investment.”
Asian giants
China leads the index thanks to its position as the world’s largest wind market, with 96 GW total cumulative installed capacity and the potential for 22-25 GW additional capacity to be installed in 2015.
Despite missing its 14 gigawatt (GW) solar target by only 1 GW, the report points out China’s investment in new clean energy topped a record US$90 billion, indicating no decline is likely in the near future.
But a key movement in the RECAI is India. Now ranked one higher at 5th position, the Indian government has set very ambitious renewables targets in the short term. Its main focus is the development of the solar sector, setting a target of 100 GW by 2022. Both foreign private investment and state funding are creating momentum for India’s solar industry.
During the February meeting between US President Obama and India Prime Minister Modi, Obama pledged financial support for this ambitious target, including US$2 billion from the US Trade and Development Agency.
Parimita Mohanty, Director of Strategic Initiatives, The Climate Group, stated: “India stands today as one of the most potentially lucrative destinations for investment in the renewable energy sector, and estimations say the market size of decentralized renewable energy (DRE) alone will be at least US$350-400 million by 2018. What the DRE sector needs at this moment is commercially viable, institutionally replicable and environmentally sustainable business models.”
European market
The RECAI index also includes 17 European countries, the biggest group analyzed. Among these countries, Germany and France lead the way, with the first keeping its 3rd position and the latter moving up one to 7th.
The role of France is particularly significant, as it will be hosting the 21st Conference of Parties this December. The government has recently passed its Energy Transition Bill, which includes a series of targets for 2030 and 2050:
- Greenhouse gas emissions will be cut by 40% by 2030.
- Renewables will account for 32% of total energy consumption by 2030, and energy efficiency measures are to be implemented in order to halve energy consumption by 2050 (compared to 2012 levels).
- France will gradually reduce its dependence on nuclear energy down to no more than 50%, compared to the current 75%.
Another interesting country is Sweden, which moved up to 20th place, as it has set a 100% renewable target to be achieved by increasing state support for offshore wind and biomass, and decommissioning old nuclear stations.
By Denise Puca