China and India have surpassed the US at the top of the latest EY Renewable Energy Country Attractiveness Index (RECAI). It is the first time after 2015 that the US falls to the third rank. The report by UK accountancy firm Ernst & Young detailed that both China and India have overtaken the U.S. on the EY RECAI report released recently.
BEIJING: In China, the National Energy Administration (NEA) announced in January 2017 that it will spend US$363b developing renewable power capacity by 2020. The investment will see renewables share in the country’s power mix increase to 50 per cent in addition to creating 13 million jobs, according to the NEA.
According to the statement, India continued its upward trend in the index to second position with the government’s programme to build 175 GW in renewable energy generation by 2022 and to have renewable energy account for 40 per cent of installed capacity by 2040.
China also plans to launch a pilot tradable green certificate program in July 2017 for project operators to prove they have generated clean power and sell to consumers. The country has also committed to cutting greenhouse gas emissions by 18% per unit of economic growth by 2020 under the Paris Agreement.
Ben Warren EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor says: “The renewable energy industry is beginning to break free of the shackles that have stalled progress in the past. More refined technology, lower costs and advances in battery storage are enabling more widespread investment and adoption of clean energy.”
“In the medium term, as renewable energy penetration rates increase, the government will have to turn its attention to the ability of India’s grid to manage intermittent renewables, especially around the evening peak, when solar availability falls away,” Somesh Kumar, Partner & Leader, Power & Utilities, EY India, said in the statement.
The report also identifies the US Government’s executive orders to rollback many of the past administration’s climate change policies, revive the US coal industry and review the US Clean Power Plan as key downward pressures on renewable investment attractiveness.
“Movements in the index illustrate the influence of policy on renewable energy investment and development – both productive and detrimental.”