MERCHANDISER
Fall in Global Renewable Energy Investment Sharpens Industry’s Focus
DESPITE AN 11% dip in global investment in 2013, an abundance of opportunities in new markets, new technologies and new sources of capital
all Governments and business will need to consider the signal
brighter times ahead, according to Ernst & Young’s (EY) latest quarterly Renewable energy country attractiveness index (RECAI). Gil Forer, EY’s Global Cleantech Leader comments:
“The 2013 fall in global investment reflects another challenging year for the renewables sector, with policy uncertainty in particular reducing investor appetite across many markets. However, it also reflects a maturing sector, with falling technology costs filtering through to lower investment requirements: increasing the dollar power per megawatt. We must now therefore focus on what needs to be done to maximize investment and deployment in light of the fact renewable energy is becoming increasingly cost competitive.” China closed the gap on
the US at the top of the index, installing a record-breaking 12GW of solar capacity in 2013 and ramping
up
its consolidation effort to accelerate market recovery. Germany remains in third place, but lost ground following the announcement of subsidy cuts and watered-down renewables targets by the new coalition government. Rapid solar market growth and a burgeoning offshore sector helped Japan to replace the UK in fourth place, while the UK continues to be hampered by political infighting and mixed policy measures. Prolonged energy strategy consultation and anti- renewables legislation have resulted in ranking falls for France and Australia respectively, while ambitious targets and a series of large-scale project announcements have seen India jump to seventh place. Competitive bidding trendsetters Brazil and South Africa have also risen in the index thanks to a plethora of new projects awarded in 2013 auctions.
US$40b 10.1GW
US$100 b 40.4 GW
US$9b 2.6GW
US$8b 3.1GW
US$6b 3.1GW
Source: BNEF
Efficiency & Effectiveness Critical A stronger focus on asset optimization and identifying
Key Industry Trends 2014 Looking ahead, resilience, efficiency and effectiveness,
technology beyond generation, new markets and innovative financing have been identified as fundamental to industry growth in 2014.
18 March 2014
new ways to extract value or reduce costs is also anticipated in 2014. Ben Warren, EY’s Global Cleantech Transactions Leader comments: “In short, efficiency and effectiveness need to be this year’s buzzwords. The market should be setting its sights on: value chain integration, consolidation on a global scale, re-powering, transaction and capital efficiencies and technology improvements. Renewable energy is now a truly global market, and stakeholders must develop a global strategy and a global supply chain, be flexible to market changes, and be willing to go in search of new markets.”
US$47b 24.8GW
value put on energy sector resilience, in light of the industry’s historic inability to absorb economic, political and environmental shocks. Governments should aim to de- politicise the energy debate in order to support stable and long-term policy measures, undertake a transparent and objective assessment of the value of energy to determine the most resilient energy mix, and embrace centralized energy planning to counter the uncertainty of the market while still fostering private sector participation. Business also has a role to play in addressing its own
energy risks, such as commodity price exposure, business continuity and regulatory compliance. This should prompt an increased focus on energy mix optimization that transcends the politics of the boardroom and identifies opportunities for reduced energy consumption and direct generation or procurement of renewable energy.
New Renewable Energy Investment & Installed Capacity in 2013 (& Movement on 2012)
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