China and India have surpassed the U.S. to become the two most attractive nations for renewable energy investment – according to the report “Renewable energy country attractiveness index (RECAI)” released by UK firm Ernst & Young – displacing the U.S. for the first time since 2015. The U.S. now stands at third place behind first place China, followed by India.
A marked shift in US policy has resulted in the demise of the Clean Power Plan, which has made renewable investors more nervous about possible reductions to the Investment Tax Credit and Production Tax Credit. Concerns also include if gas prices continue to remain low and transmission capacity remains stagnant.
In January 2017, China’s National Energy Administration (NEA) announced the nation will invest around $363 billion in renewable energy generation by 2020. The investment will see renewables share in the country’s power mix increase to 50% in addition to creating 13 million jobs – the NEA said. 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.
According to a report released last month, published by Greenpeace East Asia and industry associations and research groups, China’s wind and solar energy sectors could receive up to $782 billion in investments from 2016 to 2030. In 2016, China’s solar capacity grew an impressive 81.6% to 77.4 GW, while wind power grew 13.2% from 2015 to 2016 to 149 GW.
In India, the Government plans to develop 175 GW of renewable energy capacity by 2022 and to have renewable energy account for 40% of installed capacity by 2040. India added a record wind and solar energy capacity, both exceeding 5,000 MW, from 2016 to 2017. India has now surpassed the 10 GW solar PV installation milestone, having tripled its capacity in less than three years, according Indian Minister Piyush Goyal.
The report highlighted that economically viable renewable energy alternatives coupled with security of supply concerns are encouraging more nations to transition to a cleaner energy future. Kazakhstan (37), Panama (38) and the Dominican Republic (39) have all entered the index for the first time.
Source: Ernst & Young