The UK has climbed one position to fourth in the rankings for EY’s national attractiveness of renewable energy investment, but the organisation has warned that global green finance efforts need to improve considerably to meet clean energy demand for existing climate commitments.
EY’s 57th Renewable Energy Country Attractiveness Index (RECAI) was published this week, with the UK rising up from fifth to fourth for countries that are attractive for investment into clean energies and deployment opportunities.
EY notes that global energy capacity investments grew 2% in 2020, the second-highest recorded figure to date, despite the economic constraints caused by the Coronavirus pandemic.
Technologies such as green hydrogen, electric vehicles (EVs), and battery storage are all highlighted by EY as acting as great enablers to reaching net-zero, but the organisation noted that clear policy commitments on infrastructure and investing standards would increase the amount of capital that institutional investors and insurers could pour into these technologies.
EY’s global power and utilities corporate finance leader Ben Warren stated: “The impact of Covid-19 on economies across the globe seems to have refocused investors’ minds on the environmental, social and corporate governance agenda and there is a growing trend of considering the climate crisis and the energy transition when deploying capital.
“As a result, interest in renewable energy has risen among institutional investors who have pledged to incorporate climate-risk concerns into their decision-making processes. This increasing appetite for suitable investments is driving a number of new investment strategies amongst institutional capital to better align risk and return between sponsors and investors, or to help locate opportunities that satisfy their specific risk and return expectations.”
UK On The Rise
The UK’s position on the index continues to improve, moving from 5th to 4th place, it marks a steady development for the nation that not too long ago slipped outside of the top 10 in the rankings.
EY ranked the UK sixth in its May 2020 edition of nations and seventh in its 2018 RECAI, up from tenth in the previous iteration of the bi-annual ranking. For the latest rise, EY attributes the success of the Crown Estate’s seabed leasing earlier this year, which has made up to 8GW of new offshore wind capacity availability, while the Government also consented to the largest battery-storage project.
Globally, the US retained its position at the top of the rankings, and renewables opportunities are expected to blossom under President Biden. As well as re-entering the Paris Accord, plans to cut emissions by 52% by 2030 and deliver zero-carbon power five years later will increase clean energy demand.
China remains in second place in the rankings, having added 72.4GW of new wind power in 2020, including 48GW in December alone, while India rose to third, largely thanks to a solar market that is expected to exceed coal before 2040.
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