Page 57

energetica-india-57_asiapowerweek

RENEWABLE ENERGY SUMMARIZED BY ENERGETICA INDIA E&Y’s RECAI 2016 Ernst & Young has recently come out with the latest Renewable Energy Country Attractiveness Index. China Despite its economic downturn — although seeing some stabilization in Q1 2016 — China’s renewable ambitions remain firmly intact, albeit shifting the focus to more efficient deployment. While recently instituting province-level renewables quotas, the Government has prohibited local authorities from approving new wind projects in regions of high curtailment, and also intends to make conventional generators or transmission system operators pay renewables producers when their supplies are squeezed. Notwithstanding, China is expected to increase its 2020 wind target to 250GW, a realistic figure according to GWEC. Sights are also set on up to 200GW of solar. Meanwhile, tariffs for onshore wind and solar PV have been cut by as much as 4% and 11% respectively this year to account for falling technology costs, though still spurring the build-out of more than 7GW of solar in 1Q2016 alone. Subsidies for offshore wind will be increased in 2017 to encourage a sector that is slowly regaining momentum after a failed 2010 tender program. United Kingdom Yet further delays to a final investment decision on the proposed US$26b Hinkley Point C nuclear plant leave the UK in serious jeopardy of a major energy supply deficit within the next decade. Further, indications that the Government’s “Plan B” would be the capacity markets, rather than increased renewables generation, reinforce the already hostile policy environment for renewables. The pending 23 June referendum on a possible EU exit is also creating concerns over the risk profile of UK investments. More positively, this year could still see up to 2.5GW of solar deployed through projects eligible for the grace period following the 1 April renewable obligations expiry. The fact that the first of three offshore wind auctions, supporting up to 4GW of capacity, may be held later this year is also cause for optimism, though cost reduction conditions — and the Government’s track record on policy U-turns — leaves some uncertainty. Brazil While the market is understandably exercising some caution, Brazil’s renewable ambitions have shown surprising resilience in the face of economic volatility, tighter credit markets and presidential impeachment proceedings. Reserve tenders to award additional wind, solar and hydro contracts have been confirmed for July and October, following a late April A5 auction that saw more than 21GW of wind projects registered and set a US$62/ MWh price cap to offset higher financing costs, inflation and foreign exchange rate fluctuations. Meanwhile, the likely sale of an increasing number of generation assets by energy companies seeking to recycle cash and shed debt, including state-utility Eletrobras, should create interesting transaction opportunities, with the declining Brazilian Real particularly attractive to foreign investors. The country’s hugely underdeveloped solar market also remains a potentially lucrative lure once the current economic volatility subsides. Norway As part of an overhaul of its 2030 energy policy, Norway intends to phase out the green certificate scheme to encourage projects to be commercially viable without subsidy by 2021, with no new certificates to be introduced in the interim. The proposals also include ending the monopoly of transmission system operator Statnett on interconnector ownership to enable the market to drive efficiencies. Meanwhile, in February the state-owned utility Statkraft revived plans for a 1GW onshore wind project which was dropped last year amid concerns over falling power prices. The US$1.2b facility would be Europe’s largest onshore wind project and more than double Norway’s installed wind power capacity. RENEWABLE ENERGY COUNTRY ATTRACTIVENESS INDEX Sr.No Country 1 United States 2 China 3 India 4 Chile 5 Germany 6 Brazil 7 Mexico 8 France 9 Canada 10 Australia 11 South Africa 12 Japan 13 United Kingdom 14 Morocco 15 Denmark 16 Egypt 17 Netherlands 18 Argentina 19 Turky 20 Belgium 21 Sweden 22 Phillippines 23 South Korea 24 Peru 25 Italy 26 Israel 27 Potugal 28 Spain 29 Taiwan 30 Kenya 31 Ireland 32 Jordan 33 Uruguay 34 Norway 35 Poland 36 Finland 37 Thailand 38 Pakistan 39 Indonesia 40 Greece energetica INDIA · MAY | JUN16 57


energetica-india-57_asiapowerweek
To see the actual publication please follow the link above