This article is co-authored by Hans De Keulenaer and Michael Olivo. Hans De Keulenaer is the Manager for Electricity & Energy at the European Copper Institute. He maintains the Sustainable Energy Blog.
Hans establishes the quick stage for this article by providing information on the most attractive countries for renewable technology/energy investment; he also provides some detail about their decision-making considerations for investment in those countries. After Hans’ introductory material, Michael provides a brief op-ed commentary.
According to the Ernst & Young Renewable Energy Country Attractiveness Index, the five most attractive countries for investment are Spain, USA, Germany, UK and India, in that order.
The index provides an overall score for renewable technologies that are currently entering the market on a large scale, i.e. wind, solar and biomass. Wind, as the most important renewable from a business perspective today, is weighted 85%, solar and biomass respectively 5% and 10%. For each technology, an index is constructed based on a mixture of infrastructure and technology factors:
- Infrastructure (35%): Market risk, planning and grid connection issues, cccess to finance
- Technology (65%): Power offtake attractiveness, tax climate, grant/soft loan availability, market growth potential, current installed base, resource quality, project size
Financial aspects, i.e. access to finance, power offtake attractiveness, tax climate and grants/soft loans, often regarded as the critical factor of success for renewable energy sources, are weighted together 35.5%. They're a very necessary, but far from sufficient, condition for development.
Setting aside this informative post:
So how sexy is renewable energy?
I imagine a meeting where a board of directors is considering getting into the new renewable energy arena...
Executive Director to the board: "We might consider investing in new wind generation capacity of 500 MW but first we must consider the tax climate, and what about the market risk, and for that matter the grid connection issues? With all this planning and the lack of soft loan availability, I'm not sure if the weighted factors considering the offtake attractiveness would be supported by our infrastructure..."
Sounds sexy to me.