UK’s clean energy investment ranking drops as Germany pulls ahead

Pictured: Solar panels in Thüngen, Germany

EY has published its Renewable Energy Country Attractiveness Index (RECAI) every six months since 2003, with the 60^th edition out today (15 November). The US and China have retained their first place and second place spots respectively, while Germany has moved up one place and the UK has moved down one place, altering the layout of the top four from the last edition in May.

The RECAI states that Germany has become a slightly more attractive market due to the Government’s recent approval of a clean energy policy package it hails as “historic”. The German Federal Council moved in July to increase its 2030 renewables target, stating that 80% of power generation should be renewable by this point, up from 42% at present.

This overarching aim was bolstered by pledges to add 10GW of onshore wind each year through to 2030; to more than double solar capacity to 215GW by 2030 and to ratchet up offshore wind. Germany wants to host 30GW of offshore wind by 2030, growing to 70GW by 2045. It is collaborating with the Netherlands, Belgium and Denmark in its offshore wind efforts, with these countries having collectively pledged €135bn of public and private offshore wind investment through to 2030.

The RECAI notes that Germany has moved to streamline planning and development process for renewables to help deliver these goals.

There is little in the way of criticism or concern expressed about the UK’s clean energy investment enablers; Germany seems to have simply pipped the UK to third place by being bolder in the past six months.

The RECAI notes that the UK continues to boast the UK’s largest offshore wind pipeline and states that increasing the 2030 target for installed capacity from 40GW to 50GW through the Energy Security Strategy has increased investment. It emphasises the success of the last Contracts for Difference (CfD) auction round and notes that the UK Infrastructure Bank’s confirmation of its funding priorities, including renewables, make the market attractive to would-be investors.

Nothing is said about concerns that the Government may yet move to make solar development on agricultural land more challenging – a leadership pledge from both Liz Truss and Rishi Sunak.

Global moves

The US has once again retained its position at the top of the RECAI, with EY predicting increased investment in several clean energy sub-sectors, including green hydrogen and solar supply chains, after the Inflation Reduction Act (IRA) passed. The IRA includes the biggest low-carbon and climate adaptation investment package ever brought forward by a national government, totalling around $370bn. Joe Biden had been pressing for a greater investment, but, as the IRA faced fierce opposition, many in the space are relieved to have seen it pass at all.

China, the RECAI states, is set for a record-breaking year in terms of wind and solar installations.

Outside of the top four, the biggest climbers are Greece and Austria, which have each climbed five places. Greece’s recent renewables tender round, covering 538MW of capacity, was good news for would-be investors, the report states. The report also notes that Greece is streamlining licencing processes for onshore wind and solar and improving blended finance offerings in solar, and that it is laying the groundwork for a rapidly expanding offshore wind sector.

At the other end of the scale, Vietnam slipped six places and Turkey fell five spots. EY discusses “difficult permitting processes” in Vietnam, among other challenges, and concludes that Greece’s broader economic struggles are hitting clean energy hard.

EY notes that most nations are increasing renewable energy commitments and/or removing policy barriers to investors in the face of the energy price crisis, which is largely attributable to high global natural gas prices and has been described as the “first truly global” crisis of its nature.

RECAI chief editor Ben Warren said that many nations are making “remarkable commitments… to drive uptake of renewable energy sources and reduce reliance on gas imports.”

The publication of the RECAI ties in with the energy-themed day of proceedings at COP27 in Sharm El-Sheikh, Egypt.