Posted on: 10/10/2017
The UK has held on to its position as the 10th most attractive country for renewable energy investment.
The latest bi-annual EY Renewable Energy Country Attractiveness Index (RECAI) said that the UK’s position has stabilised after 11 renewable energy projects were awarded contracts in the second Contracts for Difference (CfD) auction.
The latest CfD auction revealed that offshore wind is now cheaper than new nuclear (at £92.50 per MWh), with Innogy and Stratkraft's 860MW Triton Knoll project, to be delivered in 2021/22, securing a £74.75 per MWh price.
Two projects set to come online in 2022/23, namely Dong Energy's 1.4GW Hornsea 2 and EDPR and Engie's 950MW Moray, will cost £57.50 per MWh.
Ben Warren, EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor, says: “These results continue a trend of dramatic cost reduction in offshore wind across Europe.
Auctions held in Germany and the Netherlands have seen similar price falls.”
China remains Number One
China holds its position at the top of the latest RECAI after overtaking the US earlier this year, while India’s second position in the top 40 country ranking looks increasingly precarious.
This follows cancelled wind energy power purchase agreements and steep falls in tariffs bid in recent auctions, placing doubt over India’s 2022 target of 100GW of solar PV.
After conceding poll position in EY’s last index, the US remains at third place in the ranking.
Further to recent executive orders to rollback climate change policies, in September the US International Trade Commission (ITC) issued a preliminary ruling stating that increased imports of solar panels could potentially cause “serious injury” to the domestic market.
The US solar industry anxiously awaits recommendations from the ITC by 13 November 2017.
The report also sees Middle East and North African countries climbing the index, owing to a surge in renewables activity and a series of policy developments, financing deals and tenders in the region.
In Egypt, the International Finance Corporation has approved US$635m for 500MW of solar projects; Saudi Arabia has invited bids for its first utility-scale wind farm – a 400MW project; and Algeria is a new entrant to the index with a 4GW solar tender.
Commenting on the global renewables landscape, Warren says, “The index highlights 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.
Collaboration with existing suppliers and innovative partners holds the key to success in this new world.”
UK also high up for smart energy investment
Meanwhile a survey by law firm Pinsent Masons found the UK, Germany and China were seen as the top three target countries for smart energy investment.
Some 46% of investors and 30% of utility companies are investing so they can access new technology, while 30% of utilities and 24% of investors are looking to invest in smart meter technology soon.
Ian McCarlie, a partner at the firm, said: “Energy companies are grappling with a seismic shift in energy markets and consumption patterns, with widespread distribution and supply market innovation driving energy companies and investors to diversify and adapt their business model.
“A clear strategy for investment into new technology is driven by the need for utilities to evolve their business in light of government policies to decentralise energy supply, and improve energy efficiency"