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IHS Markit Global Renewables Markets Attractiveness Rankings,
which tracks investment attractiveness for non-hydro renewables
(offshore wind, onshore wind, and solar PV) saw the United States
retain its spot as the most attractive market overall, as well as
for onshore wind and solar PV. The market also ranked 3rd (4th
in the previous rankings) for offshore wind on the back of a
new aggressive 30 GW by 2030 target, growing investor interest, and
the possibility of grid modernization and expansion under the
president's new infrastructure package which could rapidly unlock
growth along the country's eastern seaboard
The ranking evaluates each country on the basis of seven
subcategories that include the current policy framework, market
fundamentals, investor friendliness, infrastructure readiness,
revenue risks and return expectations, easiness to compete and the
overall opportunity size for each market. Each market is scored in
individual categories for solar PV, onshore wind, offshore wind,
and an overall renewables score is calculated.
The overall country rankings are based on a combined score for
offshore wind, onshore wind and solar PV that weights the different
technologies based on their expected levels of installations over
the next decade.
Various factors including strong fundamentals, attractive market
sizes, and previous track record in driving renewables growth
enabled Germany (Rank 2), mainland China (Rank 3), and France (Rank
4) to hold their ranks. These factors were crucial in
counterbalancing the impact of expiring central subsidies and
rising commodity costs on the wind and solar sectors in mainland
China which is expected to hinder the market's momentum in the
short term.
India's quest to improve utilization rates of their clean energy
assets has resulted in over 7 GW of renewable hybrid projects being
tendered off till date and was an important driver for the market
breaking into the top five most attractive markets globally. The
highly competitive market which has among the lowest wind and solar
tariffs globally also saw ceiling tariffs removed for wind which
helped improve economics and tender participation rates, also
resulting in India ranking as the 6th most attractive market for
onshore wind (from 9th in the previous ranking). In stark contrast,
mainland China dropped to 9th spot (from 8th in the previous
rankings) in the offshore rankings as the subsidy phase out forces
projects to compete at the prevailing coal tariff from 2022
onwards.
The ten most attractive markets span all continents,
demonstrating a broad interest in in renewable technologies across
geographies, economic and political environments, and power market
frameworks. As more markets rethink their decarbonization goals and
define clear execution pathways, there has also been significant
reshuffling in the lower spectrum of the rankings. Prominent
examples include Taiwan (12th spot, up by 1 position) which grew
its yearly offshore wind allocation plan by 50%, and Poland (14th
spot, up by 4 positions) where mechanisms for awarding offshore
wind projects was rolled out and a new proposal to ease siting
hassles for onshore wind projects was submitted.
Strong decarbonization targets, renewed focus on developing an
indigenous clean energy supply chain, an increasingly streamlined
permitting process, and improving utilization rates for renewables
assets boosted Japan to the 6th spot (from 8th in the previous
ranking). In contrast, despite its new auction calendar, Spain
dropped three spots to 8th place in the rankings as rapidly growing
investor interest and swelling project pipelines have exposed
inadequacies in transmission infrastructure and led to significant
grid connection backlogs.
The United Kingdom reinforced its multi-technology focus by
officially re-including onshore wind and solar into its clean
energy auctions, climbing to the 10th spot by displacing
Netherlands whose new auction mechanism offered a higher potential
remuneration to solar than onshore wind.
The COVID-19 crisis has significantly impacted power
consumption, which then manifested as an additional driver to
reduced energy volumes offered in renewable auctions that are tied
to anticipated demand growth, like in Brazil. Even so, renewables
have fared well despite the crisis with a surge in bilateral PPA's
offsetting the impact of reduced auction appetite, with Brazil
climbing to rank 9 (up from 10th in the previous ranking).
For more product information about the Global Renewable Market
Attractiveness Rankings contact Craig Urch at craig.urch@ihsmarkit.com.
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