India ranks 3rd in “Renewable Energy Country Attractiveness Index”

by Team Conscious Carma

India has moved up a spot to the third position on EY’s Renewable Energy Country Attractiveness Index owing to exceptional performance on the solar photovoltaic (PV) front. The US retains the top position on the Index and is expected to hold its position under President Biden. China has remained a buoyant market and maintains the second position, adding 72.4 GW of new wind power in 2020, the report added.

According to the report released on Wednesday, India’s solar sector is likely to grow substantially post the COVID-19 pandemic, with generation from solar PV forecast to outdo coal before 2040, EY said in a statement. The drastic change has been led by the government’s policy ambitions, which have led solar PV to be the most cost-competitive source of power in the region and improve further with the passage of time, it added. The observations are as per the 57th EY Renewable Energy Country Attractiveness Index (RECAI) released by EY globally.

In 2020, global renewable energy capacity investments grew 2 per cent to $303.5 billion, the second-highest annual figure recorded to date despite the impact of the pandemic, EY said. However, the report estimated that future development to achieve net-zero will require a further investment of $5.2 trillion and highlighted the role of institutional investors in financing the energy transition.

“India has moved one position above (3rd) from the previous index (4th), this is primarily due to the exceptional performance on the solar PV front. Installed solar PV capacity in India has skyrocketed to 39 GW marginally overtaking the wind capacity for the first time,” Somesh Kumar, Partner and National Leader, Power & Utilities, EY India, said. 

The economic attractiveness of solar PV and intense competition from the private sector has led to record low tariff bids, Kumar added. India also committed to setting up 450 GW of renewable energy power capacity (installed) by 2030 at a recent climate summit hosted by the US.

This will likely increase the share of renewable energy in overall power generation installed capacity to 54 per cent, vis-a-vis share in overall gross generation to 36 per cent, he said.

Ben Warren, EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor, said the impact of the pandemic on economies worldwide seems to have refocused investors’ minds on the environmental, social and corporate governance agenda and there is a growing trend towards considering the climate crisis and the energy transition when deploying capital.

“As a result, interest in renewable energy development has risen among institutional investors who have pledged to incorporate climate-risk concerns into their decision-making processes, resulting in new models of investment to locate opportunities that satisfy their risk and return expectations,” Warren added.

The reacceptance of the Paris Accord, coupled with the recent announcement to cut greenhouse gas (GHG) levels by 50-52 per cent as early as 2030 and achieve 100 per cent carbon free power by 2035, will likely see increased investment interest in the US, it added.

The so-called emerging markets now represent half the countries in the 40-strong index, including four African markets featuring in the top 30. Just a decade ago, only China and India were attractive enough to compete with more developed markets for investment, EY said in the report. While the top three countries maintained their ranking, Chile, Brazil and Mexico climbed higher in the index to be ranked in the top 10 at the fourth, sixth and seventh, respectively. Germany at fifth and France at eighth fell in the latest rankingIndia ranks 3rd in 'Renewable Energy Country Attractiveness Index'

East Asian markets such as Japan and South Korea ranked in eighth and 17th positions, respectively. The report highlighted that East Asia has a robust pipeline of clean-energy projects, with more than 800 shovel-ready schemes and with a total investment potential of $316 billion.

Source: PTI

Note: The content has been edited for style and length

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