The latest edition of the Energy Investment Map from PA Consulting Group compares the potential rates of return and risks across technologies and countries, and shows the changing energy landscape in 31 countries across Europe, Asia Pacific, the Gulf, the BRICS countries (Brazil, Russia, India, China, South Africa), and the US. The map covers renewable and conventional energy sources.
UK investment opportunities in renewables
UK investment opportunities in renewable technologies look highly attractive according to the latest map, but uncertainty around the overall extent of subsidy allowed by the UK government means this is unlikely to continue indefinitely.
This is partly a question of available funding (that is ultimately paid for by consumers), but also reflects the industry’s calls for the level of carbon price support to be frozen, and acknowledges the ultimate need for EU approval under State Aid regulations.
The map’s solar index score has dropped significantly since last year’s analysis, as UK subsidies for solar generation are decreasing, in part to reflect lower costs as solar technologies mature.
Onshore and offshore wind generation scores remain steady as strong UK policy support for wind continues. However, there is less certainty over financial outcomes and greater public debate over the extent of onshore wind development and the high cost of offshore wind.
Global renewable energy highlights in 2014
With the development of new offshore capacities progressing rapidly, Denmark has taken the lead from China, and is expected to generate 50% of its electricity from wind by 2020. Although China has dropped to third, the country remains a highly promising market for renewables, due to government support that provides attractive pricing.
The Philippines’ potential for new capacities and a robust market environment with feed-in tariffs for hydro, biomass, wind and solar projects, mean it has risen to second place from fifth in the index, and is a key target for renewable energy investors.
Other countries appearing at the top of PA’s ranking are Austria, Sweden, and the UK. Renewable projects are becoming more attractive in several European countries due to the improving economic and financial situation, allowing room for fiscal policies to support the renewables sector.
‘Investors in energy generation must contend with significant uncertainty, complex market and regulatory conditions, and the rapid advance of renewable technologies,’ says Olaf Remmler, energy expert at PA Consulting Group. ‘To make the right decisions, they need to understand the regulatory and economic factors affecting their projects and investments.’