Britain has risen one place to fourth spot among the world's most attractive renewable energy markets, reports Ernst & Young's (E&Y) latest quarterly ranking.
Australia has fallen two places in the index, to sixth place. This is partly driven by stronger performances from Japan and the UK but also reﬂects the impact of political inﬁghting on Australia’s decarbonization agenda. Meanwhile, the UK jumps to fourth place thanks to revised electricity consumption growth projections and an increase in the number of new build asset ﬁnance deals. It also reﬂects greater power offtake certainty following the release of contract for difference (CfD) strike prices in late June.
Japan’s renewable energy sector is continuing to grow rapidly as the country climbs to ﬁfth place in the rankings. Solar PV capacity forecasts are up, and a growing number of asset ﬁnance deals indicate liquidity in the market. However, grid constraints are starting to hinder deployment of solar capacity in particular.
France took eighth place from India this time, thanks to a slightly improved macroeconomic outlook and higher electricity demand forecasts. A ﬁnal decision is also on the horizon regarding the eligibility of France’s wind feed-in tariff (FIT), uncertainty over which has signiﬁcantly hindered the sector’s progress in recent years.
Meanwhile, India’s various incentive regimes are coming under ﬁre, as a lack of enforcement and oversupply bring the country’s renewable energy certiﬁcate (REC) market to the brink of collapse. A request for retroactive cuts to solar subsidies by India’s biggest solar power-producing state (Gujarat) has sparked unrest, while a court ﬁling is now stalling the country’s ﬁrst wind auction. Gujarat’s electricity regulator is seeking permission to cut its solar tariff retroactively by 28% to avoid windfall gains for developers, potentially impacting 970MW of solar capacity. In Rajasthan, a court ﬁling has stalled the country’s ﬁrst wind power auction, which would have added 1.2GW of capacity. Rajasthan had initially planned to set a maximum tariff and award licenses to developers offering the biggest discount.
India’s REC market is facing collapse due to insufficient enforcement and falling renewable costs, leaving developers with 2.1 million RECs and no buyers, and funders shunning projects heavily reliant on REC revenues. The fifth Renewable Energy Certificate (REC) trading session of the current financial year witnessed supply far exceeding demand on the Indian Energy Exchange (IEX) with 31,101 non-solar and 1,754 solar RECs being traded. For the non-solar RECs, buy bids of 31,101 and sell bids of 18,72,449 were received. Of this, 31,101 were cleared at Rs 1,500 per REC, IEX said in a statement.
The power regulator in Maharashtra has directed all distribution firms to meet their obligation for buying renewable energy in the past four years, and said they will have to pay a stiff penalty if the backlog of their "renewable purchase obligation (RPO)" is not cleared by March 2014.
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