FEATURED ARTICLE – FORBES.COM
By: William Pentland, Contributor to Forbes.com
May 1, 2018
The United States is the second most attractive nation for renewable energy investments, according to the newest annual global ranking prepared by Ernst & Young. The international accounting juggernaut E&Y released the 2018 Renewable Energy Country Attractiveness Index (RECAI) today, showing that the U.S. is now second only to China in terms of attractive to the renewable energy sector.
The report described a recent wave of investment in the renewable energy sector by many of the world’s largest oil companies, highlighting industry-leading investments by Total and Shell:
- In January, Royal Dutch Shell spent $217 million agreed to buy a huge stake in Nashville, Tenn.-based solar project developer Silicon Ranch Corporation, which itself plans to invest in multi-billion dollar pipeline of clean energy acquisitions over the next two years.
- France’s Total took a minority stake in solar and hydro generator EREN Renewable Energy last year after buying Lampiris, a natural gas and green power supplier based in Belgium, and the Saft, the leading French battery manufacturer.
The RECAI methodology, which was adjusted in 2017, relies on what E&Y calls the “five pillars,” or five categories of specific indicators that collectively comprise the inputs used to calculate rankings for 40 nations. The five pillars are supposed to capture long term energy supply and demand dynamics, policy trends and affordability of renewable energy compared to other energy resources and other global market trends affecting investment and deployment priorities. Each of the five pillars include multiple series of datasets that are converted into a score 1-5 and weighted to generate parameter scores. The scores are then weighted again to produce pillar scores and then an overall RECAI score and ranking.
“Notwithstanding renewables’ increasing cost-competitiveness, policy enablement continues to have a significant impact on market attractiveness,” says E&Y in its description of the RECAI Methodology. “This means that solar in particular is continuing to increase in importance as a proportion of the overall weighting, even taking into account the higher $/MW value of some other technologies.”
In 2017, the U.S. ranked third overall out of the 40 countries included in the RECAI ranking. India took the second top spot in 2017, preceded only by China in first place. In 2018, India has fallen to the fourth slot, replaced by the U.S. in second and Germany in the third slot. China remained in first place.
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