|May 26, 2009|
The Changing World of Renewable Energy
|Ernst & Young has released the latest edition of its Renewable Energy Country Attractiveness Indices, which in addition to an update on renewable energy opportunities by region and country, contains an insightful look at how the RE industry can and will survive the recession. |
The days of inexorable profitable growth are over, according to Guest Columnist Jonathan Johns in his insightful article "Managing renewables through the recession," who predicts late 2012 to be the cross over point when aggregate revenues exceed aggregate costs.
The firm has introduced a revision to the Solar index, to reflect the increasing role of solar thermal in electricity generation. Changes to weightings in the index have resulted in overall rises in solar score for countries such as the U.S., Spain and India which have strong concentrated solar power (CSP) potential, while some countries such as Germany and France, with strong solar photovoltaic potential, have seen drops in overall score driven by a low potential for CSP generation.
"It is ironic that the recession is likely to prove the most effective device to date in cutting emissions, and the impact has been a rapid reduction in the price of carbon, demonstrating the volatile nature of that marketplace and confirming the need for capacity-building renewable incentives as well as cap-and-trade polluter-pays mechanisms. The extent to which carbon becomes fully priced in the economy is likely to have a fundamental effect on the speed of growth of the renewables sector and its profitability. This can be achieved either by way of trading (the preferred route to date) or by way of taxation, a route likely to be increasingly tempting to depleted government treasury departments." Jonathan Johns
Boosted by the new CSP index, the U.S. has remained top in the all renewables index and extended its lead to four points. European nations have benefited from the European Economic Recovery Plan as well as announcements from the EC that one-third of Cohesion Policy funds will target a green economy. These announcements have driven a rise in infrastructure scores across the affected Member States.