U.S. Still #1 “Most Attractive” for Renewable Energy, But China is Catching Up

Image: Ernst & Young

But China is #1 in Wind Power Index
In its report titled Renewable energy country attractiveness indices, the firm Ernst & Young tries to measure how “attractive” various countries are to renewable energy development. The biggest news in this new edition of the report no doubt is that China has moved up to #2 on the overall index, bumping Germany to the #3 spot. The only thing that keeps the U.S. ahead of China is that it is slightly stronger when it comes to solar (PV, but especially CSP), biomass, and geothermal. China beats the US when it comes to wind power (which is the most important category in the weighted index) and even in infrastructure (though only be 3 points).

Image: Ernst & Young

Here are a few highlights from the report on China’s “attractiveness” to renewable energy:

The Chinese government has decided to drop a requirement that most of the components for wind power equipment be made locally. China currently requires that all wind projects use turbines with more than 70% of their components made in China, according to a regulation set by the National Development and Reform Commission in 2007.
China plans to amend the country’s renewable energy law to set a minimum quota of electricity produced by RES that state-owned grid companies must buy, in a effort to encourage them to buy more electricity from wind, solar and biomass projects.

About the US:

The passing of the US’s ambitious climate change bill, which would commit the US to cutting greenhouse gas emissions by 20% by 2020, received push-back due to a major push by the Democratic leadership to pass a health reform bill during its fall reconvening. Latest indications are that the Senate is unlikely to pass the climate bill until spring next year.
In a major boost for renewable energy, Washington has announced up to US$30b (€20.4b) in loan guarantees for renewable energy projects. The government-guaranteed loans just announced are to aid companies in solar, wind, biofuels and other renewable energy projects secure private financing.

About Germany:

Prices for solar PV panels have decreased 30% to 40% worldwide since summer 2008. The worst-affected are the high quality, upscale German photovoltaic supply chain companies, now suffering from overcapacity in a market where installation capacities are shrinking. […]
German solar PV market also faces legislative challenges in comparison with other RE sources. For instance, German trade tax legislations provide that 70% of the income generated by wind farms is taxable (7% to 17% tax rate) by the municipality where the wind turbines are located. The remaining 30% is taxed by the municipality where the operating company has its business headquarters. For solar energy plants, no such provision exists. Instead, income of PV plants is 100% taxable by the municipality where the company has its business seat.

I was a bit surprised to see that Japan only ranks #21 on the list. I expected them to be a bit more friendly to renewables… Good to see Canada in the top 10, though. Now if only they could do something about the tar sands.

By Michael Graham Richard, Ottawa, Canada on 12.07.09.


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