Clean energy investment during the first quarter of the year has dropped to its lowest level since 2009, say consultants Ernst Young.
In the organisation’s latest quarterly global renewable energy Country Attractiveness Indices (CAI) report out yesterday China maintained its top spot, although the US is surging ahead with investment up a third on 2010 to $55.9 billion.
Germany and India stay in third and fourth places, respectively, with France, Italy, Canada, Brazil and Japan also making it into the top ten.
But the UK dropped from fifth to sixth place amid concerns about the country’s commitment to renewables. There is speculation, says Ernst Young that the UK will be investing heavily in gas in the short to medium term as a ‘bridge fuel’.
The rankings have also been re-weighted to take account of the growing importance of solar power, says the report, which has also had a negative impact on the UK position.
While other countries are investing in solar power as costs fall, the UK has remained wind-heavy with little large-scale interest or recognition of solar power and another round of cuts on the cards for small-scale solar feed-in tariffs.
“There is significant concern across the green energy sector that the government will shift its focus towards natural gas as an alternative to renewables,” says Ernst Young’s energy and environment finance head Ben Warren.
He adds that there is still uncertainty over the detail of the government’s proposed Electricity Market Reform, which Warren says must stimulate investment across all forms of renewable energy.
“The recently published draft energy bill is a welcomed step in the right direction and signals clear progress, however it is important we clarify certain aspects of the new regime,” he added.
For the report, Ernst Young also surveyed 100 $1 billion-plus companies operating in energy intensive sectors.
Over a third said they expected energy prices to rise by more than 15% over the next five years and say that energy efficiency and greater use of renewables – including self-generation – are now featuring in strategic discussions.
While 41% of respondents report generating some form of renewable energy now, only one in ten say that it accounts for more than 5% of their total energy production.
“While company-owned generation clean energy is low, 68% of respondents purchase some amount of electricity generated from renewable sources,” says Warren.
But he adds that take up of renewable energy options could speed up with new financing mechanisms and as technologies become cost-competitive.
Even though market outlook in the Eurozone is generally downbeat in the short to medium term, there is “good reason for optimism” in the long term as renewable energy technologies mature and move closer to grid parity, say the consultants.
Goldman Sachs plans $40 billion clean energy investment (25-May)
Green power financing flies in face of economic downturn, says KPMG (9-May)
Global clean energy investment up 6.5% led by the US (12-Apr)
Despite record 2011, outlook for 2012 less certain says Ernst Young (29-Feb)
Article source: http://www.energyefficiencynews.com/i/5145/