India moved up a position to the third spot in EY’s Renewable Energy Country Attractiveness Index released on Wednesday as a result of an exceptional performance on the solar PV front and with generation from solar forecast to exceed coal before 2040.
The US retains top position on the Index and is expected to hold its position under President Biden. China has remained a buoyant market and maintains second position, adding 72.4 GW of new wind power in 2020, the report added.
“India has moved one position above from the previous index, this is primarily because of the exceptional performance on the solar PV front. Installed solar PV capacity in India has skyrocketed to 39 GW marginally overtaking the wind capacity for the first time,” said Somesh Kumar, Partner and National Leader, Power & Utilities, EY India.
He added that the economic attractiveness of solar PV and intense competition from the private sector has led to record low tariff bids.
The report said that India’s solar sector is expected to grow significantly post the COVID-19 pandemic, with generation from solar PV forecast to exceed coal before 2040, driven by the government’s policy ambitions, which has led solar PV to be the most cost-competitive source of power in the region and improving further with the passage of time.
It added that in 2020, global renewable energy capacity investments grew 2 per cent to $303.5 billion, the second-highest annual figure recorded to date despite the impact of the global COVID-19 pandemic.
However, the report estimates that future development to achieve net zero would require a further investment of $5.2 trillion and highlighted the role institutional investors will need to play in financing the energy transition.
“The impact of the pandemic on economies seems to have refocused investors’ minds… As a result, interest in renewable energy development has risen among institutional investors who have pledged to incorporate climate-risk concerns into their decision-making processes, resulting in new models of investment,” said Ben Warren, EY Global power and utilities corporate finance leader and report’s chief editor.
East Asian markets such as Japan and South Korea ranked in eighth and 17th positions, respectively. The report highlighted that East Asia has a robust pipeline of clean-energy projects, with more than 800 shovel-ready schemes and with a total investment potential of $316 billion.