China and India have surpassed the U.S. at the top of the latest EY Renewable energy country attractiveness index, while Canada fell from ninth to eleventh position from a year ago. Germany and Australia filled out the top five on the list of 40 top countries.
Though Canada lost ground, the report points to Calgary’s AltaGas as a leader in driving forward large-scale energy storage for its award-winning Pomona Energy Storage Facility project in California.
Battery storage is set to jump-start the clean energy transition while at the same time disrupting the traditional utility business model, the report says.
The fall for the U.S., the first since 2015, follows a marked shift in U.S. policy under the new administration of President Donald Trump. The report identifies the U.S. government's executive orders to roll back many of the past administration's climate change policies, revive the U.S. coal industry and review the U.S. Clean Power Plan as key downward pressures on renewable investment attractiveness.
"Movements in the index illustrate the influence of policy on renewable energy investment and development–both productive and detrimental. Supportive policy and a long-term vision are critical to achieving a clean energy future," Ben Warren, EY Global Power & Utilities Corporate Finance leader and the report's chief editor, said in a statement.
Economically viable renewable energy alternatives coupled with security of supply concerns are encouraging more countries to support a clean energy future.
In the report, Warren said the renewable energy sector “is, finally, breaking free” as, for example, falling costs in the offshore wind sector is beginning to deliver subsidy-free clean power, at scale, across northern Europe. “This has been a remarkable story, where the industry has rapidly refined its technology and slashed costs. It shows what is possible with supportive policy and a long-term vision.”
Similarly, in energy storage, the possibilities presented by electric vehicles “have driven enormous investment in battery technology, leading to dramatic price declines. This is enabling battery storage to insert itself into a growing number of niches within power generation, distribution and supply.”
AltaGas leading battery charge
The report notes AltaGas, along with Tesla and AES, are among those companies that stepped forward to rapidly put in place around 100 MW of battery capacity within months of contracts being signed in the past year.
The massive natural gas leak at the Aliso Canyon underground storage facility in California, which left the state at risk of forced power outages on top of its environmental consequences, prompted the state to encourage speedy development of grid-connected energy storage.
AltaGas was one of the successful bidders to meet the CPUC Aliso Canyon resource adequacy call, contracting with Southern California Edison to build a 20 MW energy storage facility at AltaGas’s existing Pomona natural gas power-generation facility. The estimated $40-$45 million project, one of the largest battery storage projects in North America, earned the company, along with energy storage software company Greensmith Energy, a Greentech Media Grid Edge 2017 Award.
"The pace and scale of energy storage deployments toward Aliso Canyon procurement have lifted energy storage into the big league of grid assets,” Ravi Manghani, director, Energy Storage Research, GTM Research, said in announcing the award last month. “These deployments will save the already resource constrained Southern California grid from falling apart during peak summer days, while natural gas supply in the region recovers to pre-leak levels."
China, India renewables leaders
In China, the National Energy Administration said it will spend US$363 billion developing renewable power capacity by 2020, which will see renewables account for half of all new generating capacity and create 13 million jobs, according to EY. The country has also committed to cutting greenhouse gas emissions by 18 per cent per unit of economic growth by 2020 under the Paris Agreement.
India continued its upward trend in the index to second position with the government's program to build 175 GW in renewable energy generation by 2022 and to have renewable energy account for 40 per cent of installed capacity by 2040. The country has added more than 10 GW of solar capacity in the last three years, starting from a low base of 2.6 GW in 2014, and aims to end sales of fossil fuel-powered vehicles by 2030 with a massive move to electric vehicles.