Spain recovers positions among the most attractive countries in the world for investment in renewable energy and is ranked 11th in the ranking, according to the report Renewable Energy Country Attractiveness Index (RECAI), prepared by the professional services firm EY. The fifty-fifth edition of this report analyzes the impact of the pandemic and the countries’ resilience, both in health and economic terms.

According to the RECAI index, Spain stands out as one of the most attractive countries with the highest growth projection in the field of renewable energy, rising four places to eleventh position. Despite having suffered strongly from the crisis derived from COVID-19, the report highlights that climate and energy policy is one of the Government’s priorities, establishing plans to increase wind and solar energy. Due to these measures, most investors are optimistic about projects in the sector in the medium term.

“Spain stands out for its commitment to alternative energy, with strong growth in both wind and solar energy last year. This investment effort has determined that it is the most important market in Europe, since 2008, in terms of solar energy capacity ”highlights Víctor M. Pérez, partner in charge of the EY Energy Sector.

It also states that despite the economic impact of Covid-19 and suffering, like other countries, setbacks in the supply chain and delays in the construction of some projects, no major repercussions are expected in the sector: “The Government ( Spanish) granted exemptions to companies to continue working on some renewable energy projects during the closure and the main manufacturers were able to resume their activity after two weeks, ”he points out.

First on the list

For the first time since 2016, the United States leads EY’s RECAI report, due to the expansion, in the short term, of the Production Tax Credit and, in the long term, to the growth of offshore wind energy, with an expected investment of 57,000 million dollars, which will allow the installation of up to 30 gigawatts (GW) in 2030.

In the case of China, investment in renewable energy has slowed down, as the government expects the market to stop receiving subsidies and turn to a more competitive outlook, in addition to lower demand caused by the Covid-19 crisis. However, although the Asian country has moved to the second position in the index, the forecasts are optimistic in the long term due to market growth.

France, which climbs from fourth to third position in the ranking, has consolidated prices through its latest auction of 1.4GW for wind and solar operators, as it gradually reduces its nuclear power grid.

More and more storage

EY’s RECAI Index dedicates a chapter to large-scale energy storage systems critical to decarbonizing electrical systems, as well as the conditions necessary to drive investment in scale batteries and storage equipment in utilities. EY experts explain that as the electrical system decreases its dependence on coal, more resources will be needed to store energy. Consequently, utilities and developers are increasing investments in batteries and storage systems.

According to the report, 12.6 GWh of battery storage is expected to be installed this year, making 2020 a record year for energy storage growth. In the longer term, a 13-fold increase in capacity is anticipated, from about 17 GWh today to 230 GWh in 2025.

Business commitment

The study also reveals that climate change, together with environmental, social and good corporate governance criteria, are increasingly strategic for companies, influencing their value in the market. Thus, institutional investors value not only the profitability of companies, but also their contribution to society. Therefore, companies are re-evaluating their corporate strategies to curb their emissions, improve their governance and disclosure related to the climate.

This reorientation of companies has determined that investments in renewable energy infrastructures increase as a means to cover their exposure to the climate, according to the report. In the case of Spain, the EY report shows that the Government presented to the European Commission its National Energy and Climate Plan, which sets the goal of a 23% cut in emissions by 2030, compared to 1990 levels.

This plan anticipates an increase in wind power from 28GW in 2020, to 40GW in 2025 and 50GW in 2030, as well as in photovoltaic (PV) solar, which will go from 8.4GW earlier this year, to 22GW in 2025 and 39GW in 2030.
For Inés Bargueño, director of Energy Transition and New Business at EY, “the biggest concern of the industry is the impact of the economic blockade and the arrival of a recession that affects energy prices. Wholesale energy rates in Spain fell 63% year-on-year in early April. However, futures prices are recovering, indicating that the market sees the impact in the short term ”.

Source: Energías Renovables