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Renewable energy: 10 most attractive countries

The energy transition is underway. Right now it is concentrated mainly in the power sector, where renewable energy now accounts for 26% of electricity generation worldwide. The cost of new solar and wind projects is less than the cost of existing coal-fired power plants, several studies have found. In fact, economics is becoming favorable to renewable energy because of the twin threats of geopolitical insecurity and climate change. Soaring natural gas prices have roiled the EU, leading to price spikes in the cost of electricity that are raising utility bills for consumers, putting pressure on energy suppliers and disrupting industries. In the U.S., inflation is sparking concerns about the high prices of gasoline.

This makes the investment climate for renewable energy increasingly attractive in the short term as energy prices rise, and as governments around the world ramp up their climate change targets.

“Energy security has risen to the top of priority lists, with governments around the world looking to accelerate and broaden the scope of their renewables programs to help reduce their reliance on imported energy at this volatile and unpredictable time,” according to EY’s Renewable Energy Country Attractiveness Index (RECAI) released in May 2022. The index rankings reflect EY’s assessment of the factors driving market attractiveness in a world where renewable energy has gone beyond decarbonization and reliance on subsidies.

Here are the top 10 countries for renewable energy investment attractiveness:

 

  1. The United States, confirming its top spot in 2021. About 20% of U.S. electricity came from renewable sources in 2021, according to the U.S. Energy Information Administration, and solar power will account for nearly half of new U.S. generating capacity in 2022. President Joe Biden has set an ambitious target of installing 30 GW in offshore wind power by 2030 to achieve the energy transition from fossil fuels to renewable sources to cope with global warming.
  2. China, in second place again this year. President Xi Ping is seeking to prioritize geothermal, hydrogen and tidal power as renewable sources of energy. China plans to reach peak carbon” by 2030 and has set a 2060 target to reach net zero. China is also seeking to promote renewable energy in rural areas.
  3. The UK, moving up two places. Battery storage projects won record subsidies in a 2022 auction, with close to 1.1GW, marking more than a fourfold increase versus last year. In January’s 2022 ScotWind tender, floating offshore scored a victory, with the Scottish government awarding more than half of the 24.8GW to floating wind projects.
  4. Germany, also up two places. Germany moved forward its 100% green power date by 15 years to 2035, also setting a near-term goal of 80% by 2030. The market is promising to phase out Russian oil imports by the end of 2022. Currently, about 41% of its power comes from renewable energy.
  5. France, falling one place. Despite a slight decrease in ranking, France has set ambitious 2050 renewables targets, with plans for 100GW of solar and 40GW of offshore wind, whilst also announcing €5bn ($5.3bn) spending for decarbonization of heavy industry. In the short term, it is aiming for 32% renewables in energy mix by 2030.
  6. Australia. Investment has been pouring into Australian renewables, such as $100mn for grid scale batteries and $40mn for low-cost solar. Clean energy was listed as one of the government’s five priorities in the AD$1.5bn Modern Manufacturing Strategy announced in 2020.
  7. India. India unveiled its Green Hydrogen Policy in February 2022, with a goal to produce a cumulative 5m tons of hydrogen by 2030. The government has set a target to bring down the cost of green hydrogen to US$2.50/kg by 2025 and to as low as US$1/kg by 2030.
  8. Japan, steady in 8th place. Japan is aiming for around 36-38% of its energy to come from renewables by 2030. A recent study has shown that Japan has 14 times more solar and offshore wind resources than needed to supply 100% renewable electricity.
  9. Spain has set itself an ambitious goal: by 2030, 42% of its energy produced must come from renewable energy sources. Its favorable geography and climate - high mountains and wind to supply electricity, abundant year-round sunshine and powerful rivers for hydroelectric power – can help.
  10. The Netherlands, up one place. Wind energy is likely to propel Netherlands to its climate goals. But it is also making a name for itself in green hydrogen investment and other new technologies.