China tops the renewable league table, followed by Sweden and Denmark. The top ten also includes the Philippines and Brazil while the U.S. is way down the list in 28th place.
The report covers 16 countries in Europe; Dubai, Qatar and the United Arab Emirates in the Middle East; Australia, Malaysia, New Zealand, the Philippines and Singapore in the Asia-Pacific; the five BRICS nations and the U.S.
The analysis examines seven renewable technologies: solar photovoltaic, concentrated solar power, onshore and offshore wind, hydro, geothermal and biomass and looks at four conventional technologies: nuclear, combined cycle gas turbine, gas turbine and coal.
PA Consulting scores each country based on two criteria: business case and risk assessment. The business case is calculated on the expected internal rate of return for each technology. The final score is based on several factors that influence the financial performance of an energy project: initial investment costs; operation and maintenance costs; revenues, including capacity factors, incentives, subsidies, market price forecasts and revenues from CHP; fuel costs and fuel price forecasts; and CO2 emissions.
The risk assessment is also weighted across key factors for each technology: country risk (credit default and financing risk); market risk (revenue risk and market potential); project risk (technology availability and grid access); and operational risk (sourcing and fuel risk, labour availability and O&M expertise).
PA Consulting says China’s position “at the head of the class for renewables is a result of a relatively unique combination of extensive, high-quality renewable resources — and the potential for their development — as well as government support that provides attractive pricing for renewable energy.”
It states that Sweden, Denmark and the UK — which is at number six in the renewables league table — scored highly because of “a combination of good-quality renewable resources plus the effective use of market mechanisms in the form of renewable energy credits.
However the U.S. ranks so low for renewable energy investment because “many key states have already met or exceeded their renewable targets, resulting in low prices for renewable energy credits. The effects on renewable investment economics are compounded by relatively low overall power prices.”
The report notes that countries on the Arabian peninsula have made significant renewable energy progress, with Saudi Arabia “leading the region with one of the world’s most ambitious energy transition programmes supported by a market-based renewable energy policy.”
The UAE is also highlighted for its “high-quality renewable resources” as well as the Gulf region’s first renewable energy framework, and PA notes that “other Arabian countries are quickly moving in the same direction.”
PA highlights a significant shift in the fortunes of renewables in Europe. It states that for a long time, many European countries were “the safest havens for renewable investments”, but now they are “losing momentum as a result of policy responses to the financial and debt crisis.”
“Customers have pushed back against the increasing energy prices resulting from many countries’ renewable policies, and policymakers have significantly scaled back on expensive feed-in-tariff programmes in many countries, notably Spain, Germany and Austria.”