Published on June 3rd, 2013 | by Andrew6
US Tops In Renewable Energy Attractiveness As Sector Comes Of Age
The US unseated China as the most attractive country for renewable energy investment in 2012, according to Ernst & Young’s (E&Y) May 2013 “Renewable Energy Country Attractiveness Index” (RECAI), which, for the 10th year running, “ranks 40 countries on the attractiveness of their renewable energy investment and deployment opportunities based on a number of macro, energy market, and technology-specific indicators.”
E&Y analysts ranked Germany, Australia, and the UK third, fourth, and fifth, respectively. Rounding out the top 10 were sixth-ranked Japan, seventh-ranked Canada, eighth-ranked India, France at #9, and Belgium at #10.
While 2012 was a year of industry and market turmoil and painful consolidation, it also saw renewable energy emerge as an economically viable alternative to fossil fuels, gaining credibility and becoming more attractive and accessible in more countries and across broader segments of society.
“Renewable energy has come of age,” writes RECAI chief editor Ben Warren. “Today, it’s a business imperative and personal prerogative; solar panels appear on homes and offices, biomass plants power factories and hospitals, and wind turbines are now a common sight.”
Renewable Energy: Not Just For Hippies & Eccentrics Anymore
E&Y’s RECAI team views the ructions the renewable energy sector has been going through as something in the way of a techno-economic rite of passage.
Writes RECAI chief editor Ben Warren in his introduction to the tenth anniversary edition:
“Today, the [renewable energy] sector is much more aligned to energy market and general economic fundamentals, and less reliant on fiscal support regimes which have been vulnerable to economic health and politics.”
2012 saw the industry reach a turning point in its evolution and development, Warren asserted.
“Declining government support – particularly in Western markets struggling with austerity – might have affected some segments, but emerging markets are eager to fill the gap as renewable energy plays an increasingly important role in energy security, enabling economic growth and diversification.”
Renewable Energy Resiliency
Global renewable energy investment did drop sharply year-over-year in 2012, falling 22% to $40.6 billion, its lowest since 2009. Gains in installed capacity, however, reflected the resiliency of the renewable energy sector, Warren pointed out.
“As the sector considers a future with less government support, recent cost reductions make mature renewable energy technologies much more affordable, and less reliant on subsidy. There will be some casualties though; we expect further consolidation, financial restructurings and bankruptcies, particularly in the supply chain.”
There are those – the world’s leading climate scientists, for instance – who would assert that no nation on the planet is doing enough when it comes to reducing greenhouse gas emissions and providing incentives to stimulate development of distributed, renewable energy resources.
That said, growth in renewable energy investment over the past decade has been extraordinary, and unparalleled. As E&Y notes, global clean energy investment totaled $269 billion in 2012. That’s five times what was invested in the sector globally in 2004.
Power To The People: The Democratization Of Energy
As Warren highlighted by way of introducing the 10th anniversary edition of E&Y’s RECAI:
“Renewable energy’s affordability, and the important role it can play in the global energy mix, is now more critical than ever. And it will likely be these factors, in addition to decarbonization, that will fuel future growth.
In his best-selling book, “The Lexus and the Olive Tree,” NYTimes’ correspondent, columnist, and author Tom Friedman lists three key drivers underpinning and driving globalization: the democratization of technology, information, and finance.
E&Y’s RECAI team, as do many others, sees the same thing happening when it comes to energy production – more specifically, that ability of ever greater numbers of people and communities around the world to harness renewable energy resources to produce their own energy.
“Who would have predicted we would be controlling energy consumption in our own home from our smartphones, even 10 years ago? Mobile applications and new technologies have given energy users more control and choice. Businesses, communities and individuals can all generate their own power today; who knows what the future holds?
“Power to the people is just beginning. Say hello to the democratization of energy.”
E&Y has put a wealth of information, analysis and insights online by way of celebrating RECAI’s 10th anniversary, including “Country Focus” reports, a review of four decades of renewable energy development, and a series of videos in which RECAI team members offer key insights and synopses of the report. For more, be sure to check out the RECAI website.