China overtook the United States to lead a quarterly index of the most attractive countries for renewable energy projects for the first time, according to the global accounting firm Ernst & Young, which compiles the list.
China, which shared the lead with the US in the first quarter, moved ahead of the world’s largest economy and ranked the most attractive for investment in wind and solar projects. The move followed the failure of a proposed energy bill in the US to include a clean energy standard, the company said on Wednesday.
“We would expect to see China retaining a dominant position,” Ben Warren, Ernst & Young’s environment and energy infrastructure advisory leader, said. “China has all the benefits of capital, government will and it’s a massive market.”
China, the world’s biggest power consumer, has set itself a goal of generating 15 percent of its electricity from renewable sources by 2020. China Development Bank Corp this year has agreed to lend up to 116 billion yuan ($17 billion) to Yingli Green Energy Holding Co, Suntech Power Holdings Co and Trina Solar Ltd, China’s biggest solar firms by market value.
The US also lost ground because the expiry of a grant program at the end of this year provides “no real effective incentive mechanism for renewable energy projects”, Ernst & Young said.
“What we’re seeing in the US is a continued resistance to committing to long-term visible and transparent support for the sector,” Warren said. “The US market has always suffered from this boom and bust tax-based incentive regime.”
China on Tuesday said it almost doubled consumer subsidies for renewable-power generation in the second half of last year and in the second quarter, it attracted more asset-financing for clean technologies than Europe and the US combined, according to Bloomberg New Energy Finance.
China also topped Ernst & Young’s attractiveness index for investments in wind power. The country last year had three turbine makers in the top 10 worldwide in terms of sales by megawatts, according to Danish researcher BTM Consult APS. Those companies are Xinjiang Goldwind Science & Technology Co, Dongfang Electric Corp and Sinovel Wind Co.
The Ernst & Young ranking includes 27 countries, with Germany, India, Italy, the United Kingdom, France, Spain, Canada and Portugal completing the top 10 behind China and the US. The accountancy firm looks at regulations, access to capital, availability of land, planning barriers, subsidies and access to the power grid when determining the ranking, which started in 2003, Warren said.