EY gives Greece top score in its renewables market index

If the advantages of large economies for green energy investments are excluded, Greece is the world’s top market in the sector, according to Ernst and Young’s latest semiannual report. Turkey and Romania remained in the top tier in the headline Renewable Energy Country Attractiveness Index and the power purchase agreement segment, respectively.

The global renewables industry is set to take a gigantic leap forward, as the push for energy security and a recessionary environment combine to create an ideal investment climate, analysts from EY wrote. The United States kept the top spot in the overall Renewable Energy Country Attractiveness Index (RECAI), published twice a year, while Greece climbed one notch in the so-called normalized ranking and became the most advanced market.

“Governments are eyeing domestically produced, low-cost, low-carbon energy in a bid to reduce their dependence on imports. The US Inflation Reduction Act has accelerated investment into clean energy, but risks causing an imbalance in international capital allocation,” the authors said. The legislation package prioritizes energy security and climate change through USD 369 billion in incentives.

In the first eight months since its passage in August, more than USD 150 billion of capital investment poured into utility-scale clean energy in the US, firming the world’s largest economy’s position. Germany switched places with mainland China and came in second. All three markets are driven by photovoltaics and onshore wind. China is also the strongest in the chart in concentrated solar power or CSP technology.

Greece is strongest among markets punching above their weight

Greece is number 16 in the headline RECAI again while Turkey climbed three spots to become 27th. Both show a similar trend to the first three markets, but Turkey is solid in hydropower as well.

The Greek government has rolled out a solar-plus-storage scheme for residential and agricultural consumers with subsidies of up to 65%. It allowed old operating wind turbines to be moved to isolated islands, the organization added.

Greece was ranked 31st out of 40 in October 2019 according to the headline indicator, and now it is number 16

EY explained that in the normalized ranking, in which Greece is now the most attractive market, it divides its RECAI score by a logarithm of gross domestic product to exclude the advantage of having a large economy. The methodology is used to identify the best performances in the core segments: energy mix, government support, project delivery and natural resources.

“It should also be noted that in October 2019, Greece was ranked 31st out of 40 in absolute (not normalized) rankings. Yet another proof of the tremendous progress the country has achieved in the RES sector in the last four years,” said Secretary General Alexandra Sdoukou from Greece’s Ministry of the Environment and Energy. She is responsible for energy and mineral resources.

Praises for Turkey in RECAI update

As for the highlights for Turkey, it has issued new 10-year feed-in tariffs for renewable energy projects installed between 2021 and 2030, with an extra five years for solar projects using domestically made components. The measure is contributing to the plans to lift the share of renewables to 65% by 2030, requiring 53 GW of photovoltaics by 2035.

The report notes that the US Inflation Reduction Act prompted governments around the world to respond rapidly. A prime example is the European Commission’s relaxation of state aid rules to simplify subsidies for batteries, solar panels, wind turbines, heat pumps, electrolyzers, and carbon capture technology, as well as for the production of the components and raw materials used to manufacture them.

The US Inflation Reduction Act prompted governments around the world to respond rapidly with their own incentives

Its Green Deal Industrial Plan targets a 40% share of domestic production of the products and equipment that the EU needs for eliminating net greenhouse gas emissions. While domestic renewable energy could accelerate markets’ broader economies, the increased pressure on supply chains will require new partnerships to be developed — and quickly, EY warned.

Bulgaria was dropped both from the top 40 headline RECAI list and the 30-member subindex of the power purchase agreement (PPA) market. In the latter, Germany overtook the first position from Spain, Greece is 26th, up by one notch, and Romania held at number 28 as the only other Southeastern European country.

Corporate power purchase agreements dominated over utility PPAs in Europe last year, both in terms of capacity (7 GW out of 8.4 GW) and deal count (129 of 161 deals). During early 2023, as global markets calmed, prices have eased considerably, and the PPA market is becoming more balanced again, EY pointed out.