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Brazil, in thirteenth place, is the first country to appear in the Renewable Energy Attractiveness Index (RECAI) ranking. The commitment to renewables is the key to overcoming the chaotic energy market and substantially reducing dependence on gas.
The EY (Ernst & Young) Global Energy team publishes its 59th report on the Renewable Energy Attractiveness Index (RECAI). This report explores how emerging renewable technologies and green fuels have the potential to substantially reduce the share of gas in power generation. The premise from which it starts this year is that “the world energy market is in chaos”.
This report explores how new renewable energy technologies and green fuels have the potential to substantially reduce the share of gas in power generation. Specifically, the report highlights:
Emerging technologies and green fuels will be key to reducing global dependence on gas
Floating solar and wind power have the potential to go mainstream as demand for new renewable energy sources grows
Latin America is a green energy market to watch if it can overcome current obstacles to growth
RECAI
Since 2003, the biannual RenewableEnergy Country Attractiveness Index (RECAI) has ranked the worlds top 40 markets based on the attractiveness of their renewable energy investment and deployment opportunities.
This year, the United States and China remain in first and second place of interest, respectively. They are followed by the United Kingdom and Germany, which continue to advance; France, which drops one position to number five; Australia, which moves up one to sixth place; India, which has fallen from third place to seventh; Japan, which remains in eighth place, and Spain and the Netherlands, which move up one position each to occupy ninth and tenth places.
The countries that have advanced the most in the RECAI classification have been Austria, whose government has committed to contributing 250 million euros (US$ 264 million) to support the development of renewable energies and to facilitate the authorization process for renewable projects, and Finland, which has approved an auction model to lease public waters for offshore wind development from 2023-24.
India stands out as falling behind as the report says the wind sector is struggling to match the explosive growth of the solar sector and is unlikely to reach its 60GW installation target by 2022.
Latin America
The first countries in the Latin American region to appear are Brazil, which has fallen from ninth to thirteenth place; Chile, which also loses two places to fourteenth, Argentina, which has gone from position 25 to 27, and Mexico, which advances one to position number 32.
Brazils renewable power generation and capacity far exceeds that of other Latin American markets, but other countries are taking important steps to advance their renewable industries, the studys analysts say.
Aunque Chile se encuentra entre los mercados con mayor potencial solar de América Latina, junto con México, las sequías en Chile, indican, “demostraron que el mercado sigue dependiendo de la energía hidráulica, mientras que las licitaciones solares previstas para junio se han suspendido indefinidamente”.
It indicates that the Andean country has established a competitive renewable energy market with historically very low auction prices, and now has the ambition to become a world leader in green hydrogen66 – the cleanest form of hydrogen, which is produced using electrolysis and renewable energy. "Chile has taken impressive steps towards its energy transition, with continued successful auctions and an ambitious green hydrogen target," said Rystads Ortega. "The country is recognizing its exceptional renewable resources and, unlike some of its peers, Chile is integrating them into its long-term development plans."
However, the analysis continues, “Chile has a structured plan to continue its development in three phases. The first consists of developing green hydrogen for domestic use -in the mining and transport sectors- and for the production of ammonia, between now and 2028. Beyond 2028, in the second and third wave, it is intended to start, and then expand, exports of green hydrogen and ammonia, and increase production. Chile believes it has the potential to produce the cheapest green hydrogen in the world. According to the Chilean government, it will be able to produce it at $1.05 per kilogram in 2030.67 The market can also expect to benefit from being relatively attractive for investment compared to other developing countries as it continues with its green hydrogen plan.”
The initial withdrawal of coal plants came amid a long drought that has caused power shortages and highlighted the need to develop or import alternative energy sources if the coal phase-out goes ahead as planned. Consequently, the development of its renewable energy industry could be even more important for Chile. The biggest challenge will be transporting green energy from the north, where renewable energy is produced, to the center of the country, where it is consumed, he concludes.
Aunque todos los países de la región se enfrentan a retos regionales y mundiales -como las limitaciones de la cadena de suministro creadas por la pandemia del COVID-19-, también hay que tener en cuenta factores locales y específicos del mercado: «Los países latinoamericanos comparten varias ventajas, como recursos atractivos y mezclas de energía flexibles que dependen de la energía hidroeléctrica y el gas. Asimismo, padecen las mismas enfermedades», dijo el analista de energías renovables para las Américas de Rystad Energy, Marcelo Ortega.
“From a technical point of view, countries need to renew their outdated transmission and distribution systems, since the current infrastructure is not designed to connect areas rich in renewable resources, usually far from cities, with charging zones. On the other hand, political support for renewable energy projects varies with changes in government, which increases the risk for developers who want to invest in these countries.
PPP
The PPP index, which was first introduced in the study six months ago, continues to expand.
The study highlights Spain, which occupies the first place, and the Portuguese market, in position number 17. Both are "recovering well from the shock suffered last September, after a decree was modified in November to curb the alleged excess profits of suppliers during the exceptional prices. Markets peaked in early March but remain volatile, especially for solar, so PPAs can provide stability. Portugal is a much smaller but growing PPA market, with the first deals done recently.”
Brazil occupies thirteenth place in the ranking of PPAs, Chile, sixteenth, and Colombia, twenty-first. |
