Ernst & Young released its quarterly Country Attractiveness Indices report (CAI) for renewable energy today. There are some quite interesting observations regarding the state of and projections for renewable energy (and specific renewable energy sectors) within the report, but the ranking of the top countries in the index remains the same:
Renewable Energy Outlook Uncertain
With all kinds of economic struggles and uncertainty in Europe, the 2012 outlook for renewable energy in the region is not as bright as in 2011.
“The sovereign debt crisis continues to stifle renewable energy investment in the Eurozone, along with Governments scaling back their ambitions for the sector,” Ernst & Young writes.
“Simultaneously capital scarcity and increased competition from Asia will continue to put pressure on developed markets for the foreseeable future.”
“Early indications for 2012 are that it will be more challenging for stakeholders, with mature markets getting softer due to continued liquidity constraints and the ongoing withdrawal of government incentives,” Gil Forer, Ernst & Young’s Global Cleantech Leader, says.
“The perfect storm of Basel III, banking downgrades and Eurozone instability has increased the underlying costs to banks of lending, especially long-term,” Ben Warren, Ernst & Young’s Energy and Environmental Finance Leader, summarizes.
“With Basel III to be fully implemented by 2019 we feel it is likely that there will be further impacts on costs of bank funding from the legislation during 2012 and therefore additional increases in margins and reducing availability of long-term bank debt.”
Renewable Energy in Asia Still Hot… but Complicated
“However within emerging markets we continue to witness growth in the levels of capacity, as energy security concerns and demand for jobs drive increased government commitments to renewable energy,” Forer notes.
But the researchers find a mix of increasing solar energy targets and underdeveloped grid infrastructure that limits usefulness of new wind power projects.
US Wind Support Now Gone
As you well know, US policy support for the wind industry, especially in the case of the Production Tax Credit (PTC), has dropped off a cliff at the federal level, leaving the industry worse off than it was in 2011. 2012, thus, is looking to be a less exciting year for renewable energy fans in the US.
Germany on the Line
Germany has been a solar powerhouse for years now. But proposed changes to its feed-in tariff program for solar that are on the table right now could have a dramatic and negative effect on that industry.
“The German solar photovoltaic (PV) market expanded in 2011 with more than 7GW installed, but if currently proposed reductions and restrictions in photovoltaic (PV) feed in tariffs pass the German government in March, this would significantly suppress market activity in 2012 and beyond,” Ernst & Young note.
Middle East and North Africa (MENA) May Be Ready for a Growth Spurt
Despite waning and uncertain renewable energy support from the leaders mentioned above, the Middle East & North Africa (MENA) region offers up a bit of relief, as it looks set to start booming (as reported here on CleanTechnica a few times this year).
“An abundance of solar and wind resources are expected to attract a significant amount of investment in the short to medium term, particularly in more economic and politically stable markets. Many countries in the region are seeking to significantly increase the proportion of renewable energy in their generation mix as they look to diversify their predominantly hydrocarbon fuel supply and to meet the ever-increasing consumer demand.”
As written here on CleanTechnica several times in the past several months, consolidation within maturing renewable energy sectors (especially solar) make consolidation of cleantech companies inevitable. Company mergers and acquisitions are likely to continue to a high degree throughout 2012.