Ernst & Young: Emerging markets big winners

By Rob Starr, Content Manager, Big4.com

With an abundance of natural resources and an increasing demand for energy; emerging markets have been the big winners within the clean energy sector during 2012 according to Ernst & Young’s quarterly global Renewable energy country attractiveness indices. However, after eight years of rising levels of new investment within the sector, it seems likely that there will be a drop, this year following a record year in 2011.

Throughout 2012, changing conditions within the clean energy sector have been tracked by the Ernst & Young’s quarterly global Renewable energy country attractiveness indices, which scores 40 countries on the attractiveness of their renewable energy markets, energy infrastructure and the suitability for individual technologies.

China remained at the top of the All Renewables Index (ARI) in 2012, partly driven by increased solar targets designed absorb over-supply in the solar panel market and counter the impact of US and EU protectionist measures. Q2 2012 also saw a 92% increase on Q1 2012 new investment levels for China. The increase was made up, not only of domestic activity, but also increased outbound investment into major energy independent power producers’ platforms such as China Three Gorges Corp’s US$2.5b investment in EDP Renovaveis, and Sky Solar’s US$800m solar plans in Brazil. However looking forward, challenges remain, particularly in the wind sector where many turbines have been left unconnected due to insufficient grid capacity, forcing China to shift its focus toward energy infrastructure improvements and tighter regulations on new wind project approvals.