Start

Contents

03

04

05

Foreword

RECAI 61

Normalized index

RECAI 61

06

07

13

Normalized index

PPA index

Key developments

Analysis

PPA index

Renewables highlightsfrom around the world

How market actions are
impacting the global
journey toward net zero

Foreword

Key developments

18

21

27

Analysis

Regional focus

Data and methodology

Contacts

Regional focus

India: working round the clock
to cement its investible position
in renewable energy

RECAI 61
Normalized index

Data andmethodology

PPA Index

Contacts

Renewable Energy Country Attractiveness Index 6102Foreword

No one said the path to net zero would bea smooth one. Decarbonizing our worldis, undoubtedly, the biggest challenge ofthe century. It will require all hands on
deck; a plethora of hurdles will need to be
overcome, and courageous decisions will
have to be made.
Indeed, headwinds have emerged in the current
macroeconomic environment, highlighted byrising interest rates, insecurity of supply chains
and the increasing cost of renewables project
development. The energy crisis, sparked by the
war in Ukraine, also serves as a firm reminder ofthe limitations of interdependent power markets
and the issues that can arise from a reliance on
imported energy. Meanwhile, the commitment toenergy security has never been stronger.

Arnaud de Giovanni
EY Global Renewables Leader

At the same time, we are seeing signs of a
mid-year recession — and, given that suchan environment typically facilitates spending
and incentives for infrastructure projects, agenerational opportunity has emerged for the
renewables industry to turbocharge green energy
demand more than subsidies have in the past.
For larger economies, it could even drive growththrough scaling up capacity in the push for energy
independence.

Equally important is that the legislation has
sparked a race to the top among international
markets eager to boost the competitivenessof their renewables industry. For instance,in response to the Act, the European Union
announced its Green Deal Industrial Plan,5 which
offers support for the development of green
technologies, with a target to manufacture 40%of the products and equipment it needs for netzero technologies.

Consequently, tailwinds have emerged in theform of innovative, game-changing policy, themost prominent of which is the US Inflation
Reduction Act (the Act), which earmarks a
combined US$369b for investment in energy
security and climate change.1 In this editionof RECAI, we explore the impact and influenceof the Act on renewables investment activity
across global markets.

India has also stepped up investment andaggressively raised targets for its renewables
industry. This edition of RECAI takes a deeper
dive into developments there as the market
aims to become a significant exporter of green
ammonia and hydrogen.

A broad range of renewable energy sources,
vectors and applications — from wind and solar tonewer innovations such as hydrogen and electricvehicles (EVs) — will get a major boost from tax
credits, and new investment opportunities havebeen sparked throughout the supply chain. It’s
early days — the Act was passed in August 2022
— but, in its first six months, more than US$90b2
of capital investment has flooded into US clean
energy development.3 Given that, in 2022, a
total of US$50b4 was invested, of which US$40b
came in the three months after the Act’s passage,
its colossal role in catalyzing investment inrenewables cannot be overstated.

Of course, it would be remiss not to acknowledge
that the current path to net zero comes withrisks. The Act intensifies competition for capital,and some markets could be left further behind.
Domestic renewable energy supply chains could
accelerate markets’ broader economies, but theincreased pressure on supply chains will require
new partnerships to be developed, and this willtake some time.
Increased competition will accelerate the energy
transition, however, as exemplified by the factthat global investment in energy transition
technologies rose 19% in 2022, to a record
high.6 This will speed up development of nascentgreen technologies that will benefit the world by
combating climate change.
With policy support for renewables bolstered innumerous markets, a unique opportunity has
emerged for the industry, worldwide, to double
down on efforts to stimulate renewables supply
and demand and accelerate economies.

Ben Warren

RECAI Chief editor
Partner, Renewables Corporate Finance,
Ernst & Young LLP

Foreword

Key takeaways• The●
limitations of relying on imported
energy have been highlighted by recent
world events and markets’ strengthenedcommitment to energy security.
• The●
current economic climate, with its
inflationary pressures, could facilitate
spending and incentives for infrastructure
projects, enabling even greater
opportunities for the renewables industry
to turbocharge green energy demand.

RECAI 61

Normalized index

PPA index• Innovative,●game-changing policy —including the US Inflation Reduction
Act — is set to boost a broad range ofasset classes.

Key developments• The Act has accelerated investment into
clean energy (and other decarbonization
investments), but risks causing an
imbalance in international capital
allocation.

Analysis• Players looking to flourish in this newenvironment will need access to flexible
capital and the full energy value chain, plus
agility to operate in multiple jurisdictions.
• India●
is consolidating its leading position
for solar and is on its way to becoming anexporter of green ammonia and hydrogen.

Regional focus

Data andmethodology

Contacts

There may be some twists and turns to navigate
on the road to net zero, but the path is becoming
clearer, and the speed of travel is increasing.
Renewable Energy Country Attractiveness Index 61

03

RECAI 61

Index
Since 2003, the biannual RECAI has
ranked the world’s top 40 markets on
the attractiveness of their renewableenergy investment and deployment
opportunities. The rankings reflect ourassessments of market attractiveness andglobal market trends.

US

Germany

1

2

3

+1

UK
France

5

6

India
7

1

3

2

4

Australia
Spain

8

5
7
8

40
40

Saudi Arabia

39

Thailand38

38

South Africa 37

37

Vietnam 36

36

Mexico35

Switzerland

34

Philippines

33

Kazakhstan
Norway+3

13

13 Ireland

Current ranking shown in circles withprevious ranking noted at the bottomof each segment

16

15

18

16

14
21

26

31

14 Chile

12

34

32

32

30
29

29

Austria28
27
Egypt
Turkey

17

20
30

28

26

Taiwan

23

25

24

19

24

Belgium

22

25

23

18
19

22

The environment minister has stated thatthe energy industry can expect to see€60b (US$66b) of investment by 2030,
while increasing wind and solar capacity by
3.4GW and 6.4GW respectively. Portugal isalso set to launch an auction covering therights to sell hydrogen to the national grid.11+2

Netherlands

Foreword

RECAI 61

Saudi Arabia
The market has launched the developmentof the world’s largest solar PV plant, ataround 2GW by the end of 2025, as partof plans to install 27.5GW of new solar
capacity by 2030. The Kingdom is also due
to launch its greenhouse gas certificatesmarket this year, while launching
renewables capacity tenders backed by the
Public Investment Fund.12

21

20

Italy

GreecePolandBrazilIsraelSwedenFinland

Portugal

South Korea Morocco

Canada-4+3

TurkeyThe government has issued new 10-year
feed-in tariffs for renewable energy projects
installed between 2021 and 2030, withan extra five years for solar projects using
components produced in Turkey. This
supports plans to decarbonize the energy
mix to 65% renewable sources by 2030,
requiring 53GW of solar PV by 2035.10

Argentina
Argentina is committed to growing
renewables, but its energy grid is thought
to be insufficient to support a further
significant rollout of renewables capacity,with recent investment in generating
capacity not matched by infrastructure.
Given the potential of solar in the northof the market and wind in the south, grid
capacity in these areas is a key issue.13

Plans to lease plots for 5GW of offshore
wind projects by 2026 have been set inmotion in the province of Nova Scotia, withthe projects targeted for operation by theend of the decade. The government has also
introduced refundable tax credits for capitalcosts on new-build renewables projects.91735

Argentina

12 Canada

15

33

27

Portugal

Normalized index

PPA index

11

No change in attractiveness sinceprevious index

31+3

A new target of 3GW of offshore floating
solar capacity has been announced as partof a €28b (US$30.7b) package to achieve2030 climate targets. The market has
also reached its 6GW onshore wind target,with a further 800MW due to come online
during 2023.8

11 Denmark

9

Decreased attractiveness comparedwith previous index

40+1

10 Japan10

Increased attractiveness comparedwith previous index

41

Netherlands

9

6

JordanThe market is set to continue accelerating
expansion of its solar photovoltaic(PV) sector as a core element of its
decarbonization strategy, with thegovernment setting targets of 11GW
of ground-based and 11GW of rooftop
installations per year from 2026. Theenergy minister has also announcedplans to subsidize the decarbonization ofenergy-intensive industry.7

China Mainland
4

Germany-1

Key developments

Analysis

Regional focus

Australia
Despite 2022 being a record year for
renewable energy project commitments,
Australia is currently not on pace toreach the federal government target of
82% renewable generation by 2030, with
deployment rates required to at least
double to achieve this.14

Data andmethodology

Contacts

See page 23 for RECAI methodology.

Recent global trends have had a significant and direct effect on renewable energy markets through both the gas crisis and supply chain concerns.
To ensure a more relevant and appropriate reflection of the current investment climate the RECAI team has adjusted the model to be morereflective of the macroeconomic factors driving the attractiveness of individual markets. The model now has an increased weighting for the macro
fundamentals pillar, which factors in the economic stability, ease of doing business and investment climate within markets.
Renewable Energy Country Attractiveness Index 61

04

Normalized index

The RECAI uses various criteria to compare the attractiveness of renewables markets, such as the magnitude of thedevelopment pipeline, that reflect the absolute size of the renewable investment opportunity. Hence, the index naturally
benefits large economies. However, by normalizing with the gross domestic product (GDP) we can see which markets are
performing above expectations for their economic size.

+1

The government continues to implement policy to support thegrowth of renewable energy. With the announcement of its new
solar-plus-storage scheme, residential and agricultural consumers
will be able to claim subsidies to cover up to 65% of the installation
cost of rooftop panels and batteries. Policy has also emerged toallow old operating wind turbines to be moved to isolated islands,
to boost renewables production at these locations and extend theuseful life of the turbines.15

In this way, the normalized index helps reveal ambitious plans for energy transition in smaller economies, creating someattractive alternatives for potential investors.
Normalized
ranking

MarketPrevious
ranking

1

Greece2

Movement vs.
previous

Movement vs.
previous

GreeceRECAIranking

Normalized
ranking

MarketPrevious
rankingRECAIranking2

16

21

Canada36

12Morocco1

23

22

Belgium

20

24

3

Denmark3

11

23

Honduras

21

60

4

Jordan4

40

24Philippines

19

33

5

Chile

5

14

25

Norway43

31

6Australia

7

07

26

Austria34

29

7

Ireland

6

13

27

Kenya

28

46

8

Germany

10

02

28

Taiwan38

26

9Finland9

21

29

Tunisia

23

59

10

Portugal

8

22

30

United States

31

01

11

France

13

05

31

Italy

24

15

12

UK

12

04

32

South Africa

41

37

13

Spain

14

08

33

Argentina

25

30

14

Netherlands

11

09

34

China Mainland

29

03

15

Israel16

19

35

Dominican Republic

26

48

16

India

15

06

36

Vietnam

39

36

17

Poland

17

17

37

Japan

32

10

18

Kazakhstan

22

32

38

Brazil30

18

19

Sweden18

20

39

Panama

33

56

20

Egypt

27

28

40

Peru

49

41

0
+1

0
+1

RECAI 61

Chile

Normalized index

Chile continues to establish itself as a leader in the renewable energy
industry. Driven by strong government buy-in, natural resource
and the use of global partnerships, it has become an attractive
destination for foreign investment. Targets of 80% renewableenergy by 2030 and carbon neutrality by 2050 are ambitious,
and will require the market to build upon its existing infrastructure
investment commitment to ensure the renewable energy produced
can be distributed appropriately across the country.16

PPA index

Key developments

FinlandFinnish onshore wind capacity grew by 75% last year (2.4GW of
new installed turbines), driven by domestic and foreign investment.
Wind is now Finland’s single largest driver of foreign investment,
which will be core to the government’s target of carbon neutrality
by 2030. The market has also entered into a cross-border tender
for renewable energy as part of the EU renewable energy financing
mechanism, which will allow for up to 400MW of solar PV projects
to be built in Finland.17+4

Foreword

Kazakhstan
To create a more attractive environment for investors and install
6.5GW of renewables capacity by 2035, Kazakhstan has announced
that it intends to improve its regulatory framework. Furthermore, it
has identified the potential of green hydrogen and set its sights on
becoming a net exporter of the fuel by the start of the 2030s. The
government has signed an agreement to begin the development of
a 20GW green hydrogen plant, which is expected to produce up to
two million tonnes per year.18

See page 24 for normalized RECAI methodology.

Renewable Energy Country Attractiveness Index 61

05

Analysis

Regional focus

Data andmethodology

Contacts

PPA Index

Germany

Corporate PPA market rides out
a bumpy year to come out on top
in Europe
During 2022, corporate powerpurchase agreements (PPAs)
significantly overtook utility
PPAs in Europe, both in terms of
capacity (7GW of 8.4GW) and deal
count (129 of 161 deals).19 This
trend is expected to develop inother parts of the world.
It has not been an easy ridefor corporates in the past
year, however, with volatile,
sky-high pricing — plus project
scarcity — flipping the market
in sellers’ favor. Inflation also
affected PPA pricing structures,with few developers agreeing
to no indexation — but thisrequirement has eased, with mostnow offering flat nominal pricing.
During early 2023, as global
markets calmed, prices haveeased considerably, and the
PPA market is becoming morebalanced again. With wholesale
power price futures generally
reducing compared with current
prices in many markets, somecountries being at risk ofincreased cannibalization ofrenewables’ capture prices, anddevelopers needing long-term
revenue security, the power of along-term PPA is sending sellers
back to corporates.

Germany1Physical and sleeved PPAs are
becoming less popular, as “shaping”
costs have spiraled, while pay-asproduced virtual PPAs are now thenorm in many deregulated markets.

For the first time since the EY PPA Index began, Spain has beenknocked off the top spot by a rising PPA star. Since October
2021, Germany has steadily moved up the PPA Index, fromfourth position, and PPAs are now enabling the market’stransition to renewables for energy security, as well as helping
to reduce costs and decarbonize. Offshore wind deals play a
key role in German PPAs, especially for large industrials. For
smaller corporates, onshore wind and solar PV are the maintechnologies. Feed-in tariffs, and then government tenders,
used to be the preferred choice of developers, but PPAs are
now equally attractive.

Spain
US

2

UK

3

4

France

5
6
2

1

3

India

7

4

6
5
8

9

Decreased attractiveness comparedwith previous index

29

Lithuania
Romania

25

28

27
26

27

Ethopia
Greece22

18

26

Thailand

12
13

21

19

23

16

Morocco

15
16
17

23

Belgium

22

21

Egypt
Colombia

20

19

18

Ireland
South Africa

FinlandItaly

14 Brazil

17

25
24

12
13

14

24
20

Sweden11

Current ranking shown in circles withprevious ranking noted at the bottomof each segment

28

Poland11

10

New entry

29

10

15

No change in attractiveness sinceprevious index

30

Netherlands

97

Increased attractiveness comparedwith previous index

Austria

Denmark

8

Chile
Portugal

NorwayJapan

RECAI 61

US

Australia

Foreword

Static at No. 3 in our global PPA Index, the US was the origin of
PPAs and has been their powerhouse for more than a decade
now. The recent Inflation Reduction Act, which is spurring
the US renewables investment market, is expected to drive
growth of PPAs further. It was another record year in 2022,with 16.9GW of PPAs, of which at least half were via large
technology companies.20 An interesting development has been
the rise of vPPAs for Scope 3 reduction of corporate suppliers’
emissions, as opposed to the typical Scope 2 corporate’s own
operational emissions.

PolandJumping five places into the top 10, Poland was the fourthlargest PPA market in Europe in 2022, behind Spain,
Germany and the UK. With many companies having significant
manufacturing operations in Poland, and with a carbon-heavy
grid, there is a strong driver for renewable PPAs. But the future
is not plain sailing. In late 2022, the government introduced ahard cap on power producers, including RES pricing to protect
consumer costs, but this led to great uncertainty for PPAs,
and a number of deals were paused. This cap is expected to be
removed at the end of 2023, which should come as welcome
news to pending deals.

Ireland
A relative newcomer to PPAs, Ireland is now seeing growinginterest, especially among large data center and pharmaceuticalcompanies with significant footprints in the market. Its
four-rank rise in this edition of RECAI is based on several
recent deals and the forthcoming pipeline. Ireland’s Climate
Action Plan also aims for 15% of the market’s electricity to bedelivered through PPAs by 2030. In 2022, there was 647MW
of PPAs in Ireland,21 competing with its Renewable Energy
Support Scheme auction system.
See page 26 for PPA methodology.

Renewable Energy Country Attractiveness Index 61

06

Normalized index

PPA index

Key developments

Analysis

Regional focus

Data andmethodology

Contacts

Key developments

Renewables highlightsfrom around the world
Developing policies to encourage the build-out of renewables
has risen to the top of many governments’ agendas, and thispush for energy security in a recessionary environment hascreated a viable opportunity for significant investment. Here,
we look at key developments within 10 global markets —from Egypt’s ambitions for its onshore wind sector to Japan’s
push to increase its share of the solar PV market.

1

No change

RECAI ranking

2
Up 1

RECAI ranking

45

No change

No change

RECAI ranking

RECAI ranking

Foreword

RECAI 61

10

13

28

30

RECAI ranking

RECAI ranking

RECAI ranking

RECAI ranking

Down 1

No change

Up 1

Normalized index

Down 4

PPA index

Key developments

3136

RECAI ranking

RECAI ranking

Up 3

Analysis

No change

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

07

Key developments

1

No change

RECAI ranking

US: Connection and construction delays slow
energy transition
The US’s journey to net zero has not been helped by a gridlock of renewable energy
projects waiting for connection to regional grids. Seven leading regional grids
reported large interconnection queues, totaling 1TW, at the end of 2022. Solar was
the technology with the most capacity in queues — almost 360GW — while standalone
battery storage had 258GW.22
Despite significant growth of the market’s offshore wind sector, the Biden
administration’s ambitious goal of having 30GW of offshore wind power operatingby 2030 is likely to be missed by 10GW, according to current construction dates
announced by developers. The target could still be met, however, if new lease areas aredeveloped faster and there are additional investments in supporting infrastructure andsupply chain.23
The US’s EV sector has received a boost, meanwhile, with US$2.5b of new funding
announced in March to support EV charging and hydrogen infrastructure through theCharging and Fueling Infrastructure Discretionary Grant Program, established by the
Bipartisan Infrastructure Law. Grants will be provided over five years to cities, counties,
local governments and Tribes through a Community Program , while a Corridor
Program will support development of hydrogen infrastructure along designatedalternative fuel corridors.
The program will help boost the US’s goal of adding 500,000 public EV charging
stations by 2030.24

2
Up 1

RECAI ranking

Germany: Offshore wind tender launched amid
power market reforms

Foreword

Germany climbs one place to second position for the first time in a decade,overtaking China Mainland in the index. The market has launched a tender for
two offshore wind lots of 900MW each in the seabed areas off the Norderneyshore. The bid deadline is 1 August 2023, with development rights expected to
be granted in the first quarter of 2024 and the wind farms fully operational by2028.25 Germany boasts offshore wind power capacity of 7GW and has a target ofreaching 30GW by 2030.26

RECAI 61

Normalized index

Germany also continues to accelerate power market reform, transitioning awayfrom fossil fuels as it pushes to achieve its goal of renewables comprising 80%
of its power mix by 2030. Currently, renewable energy accounts for 46% of themarket’s power consumption, up from 41% at the start of 2022.27

PPA index

In December 2022, the European Commission approved Germany’s renewableenergy act (EEG 2023), which includes a budget of €28b (US$30.5b) and provides
aid to support production of renewable energy through a market premium paid by
the network operator to the producer, on top of the market price.28

Key developments

In April 2023, Germany ceased operations at its last three remaining nuclear
power plants.29 While this is a major milestone in its progress to accelerated energy
transition targets, there is likely to be an increase in the use of coal in the shortterm, to reduce the effects of intermittency in the power supply.30

Analysis

In this edition of RECAI, we explore the likely global impact and influence of the US
Inflation Reduction Act policy: see page 13 of this report.

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

08

Key developments

4

No change

RECAI ranking

UK: Green hydrogen certification planned for 2025
Seeking to increase investment in the growing green hydrogen market, the UKplans to develop a globally recognized certification scheme for green hydrogenproduction by 2025. The government will consult with industry on the scheme,
which aims to build transparency and confidence in this nascent sector.31
Meanwhile, in the market’s fifth Contracts for Difference (CfD) scheme round,a budget of £205m (US$255m) has been confirmed. It will include £170m(US$211m) reserved for established technologies, which, for the first time,
includes offshore wind. Additionally, £35m (US$44m) will be set aside for
emerging technologies. Results of the auction are expected to be revealed inlate summer 2023.32
While the UK’s offshore wind sector continues to grow, players in the market’s
onshore wind sector are calling for reforms to the planning system. Rules oncommunity consent have severely limited development, particularly in England,
where only two small turbines were installed in 2022.33

5

No change

RECAI ranking

France: Progress on offshore wind, but still trailing on
renewables targets

Foreword

France has taken steps forward in its offshore wind development, with theselection, in March 2023, of EDF Renewables and Maple Power as the winningbid in the fourth offshore wind tender to build the market’s biggest offshore
wind farm. The Centre Manche 1 wind farm, off the coast of Normandy, will
have a capacity of 1GW, enough to power 800,000 homes. The project wasawarded at a tariff of €44.9/MWh (US$49/MWh).34

RECAI 61

Normalized index

Despite this, France still needs to ramp up its green energy sector. The share of
renewables in the electricity mix rose by just 1% last year, from 25% in 2021 to
26% in 2022.35 Onshore wind is one area that has been stalling. The market’s
last onshore wind auction was supposed to add nearly 1GW of capacity, but
only four out of 60 projects were awarded, with a total capacity of 56MW.
A convoluted and unclear instruction process was blamed for the massive
undersubscription.36

PPA index

Key developments

Solar has seen growth, with installed PV capacity rising to 15.8GW, but thecurrent pace would achieve about 31GW by 2028, well short of France’s goal of
between 35GW and 44GW.37
Recognizing that lengthy permitting procedures have been a hindrance, France’s
National Assembly and Senate passed the Renewable Energy Acceleration Billin February, simplifying applications and permitting, and limiting appeals. The
legislation also gives local municipalities the authority to identify renewableacceleration zones, where permitting will be expedited to between one andthree months.38

Analysis

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

09

Key developments

10
Down 1RECAI ranking

Japan: Solar PV and offshore wind primed for growth
Japan has long been a leader in solar PV innovation. In 2007, it was the firstmarket in the world to build a floating solar installation, and it currently trails
only China and the US in installed solar capacity, expecting to top 90GW before
the end of 2023.39
Blessed with some of the most innovative companies in the sector, such as
Panasonic and Mitsubishi, Japan has long possessed the technological knowhow. Now, amid growing trade tensions between the US and China — the world’s
biggest producer of solar panels — Japan is in a perfect position to take anincreasing share of the market. It is seeking to import more silicon, to boost its
production of solar technology.
Japan’s offshore wind market is also expected to experience significant growth.
After the government’s recent revision of guidelines for the second round of
offshore wind auctions, momentum has been picking up. The auction, whichcloses on 30 June, will select operators for four new areas capable of generating
1.8GW.40 Current capacity sits at 190MW, with the market’s first commercialscale offshore wind projects commissioned in December 2022 and January
2023.41 Japan’s ambitious plans seek to add 10GW of offshore wind capacity by
2030, and between 35GW and 45GW by 2040.42

13
No change

RECAI ranking

Ireland: Counting on offshore wind

Foreword

Ireland has ambitious plans to install 7GW of offshore wind power by 2030 and
37GW by 2050, representing a bold vision for a market that currently has only
25MW of offshore wind capacity and 4.3GW of onshore wind farms.43

RECAI 61

On 11 May, four projects totaling 3GW were announced as successful in
Ireland’s first offshore wind auction. The average price of €86.05/MWh(US$94.55/MWh) was viewed as hugely competitive and one of the lowest
prices paid by an emerging offshore wind market. Altogether, the projects
will produce more than 12TWh/year, which is more than one-third of Ireland’s
electricity consumption. The auction had been open to six offshore windprojects, and the two unsuccessful ones are still eligible to secure a route tomarket through a corporate PPA or a future auction.44

Normalized index

PPA index

In May, Ireland also announced plans to create the National Industrial Strategy
for Offshore Wind, which is expected to be published in the first quarter of2024. It will seek to develop supply chain opportunities and reduce risks frombottlenecks, while also introducing measures to develop local and export
demand for offshore wind energy, and establish clusters of economic activity
for the offshore wind sector.45

Key developments

Analysis

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

10

Key developments

28
Up 1

RECAI ranking

Egypt: Eyeing a leading position in wind energy
Egypt has high ambitions for onshore wind and has signed 10 memorandaof understanding (MoUs) for wind power projects since the start of 2022.
By 2026, 4.3GW of new installations will have come online, followed by anadditional 1GW of capacity annually after 2027, to bring Egypt’s total installedwind capacity to 8GW by 2030. Considering its current installed capacity is
1.7GW, this is an enormous undertaking and will establish it as a leading windenergy market in the region.
While hosting COP27 in November 2022, Egypt signed framework agreements
for nine green hydrogen and ammonia facilities, which could result in up to
US$83b being invested into these markets.46 Egypt is now working to sign
final agreements on these deals, one of which — with China Energy to build a
US$5.1b green hydrogen plant — has already been approved.47
Egypt is seeking to raise the proportion of renewables in the energy mix
to 20% by the end of 2023, on the back of strong wind and solar growth.
Amid this growth in renewables, the government is also expected to start
decommissioning 5GW of gas-fired power plants this year, which is about 8% of
the market’s total generation capacity.48

30
Down 4

RECAI ranking

Argentina: First public tender since 2019 launched

Foreword

Argentina is holding its first public tender for renewable energy since 2019. The
country’s fourth round was delayed because of the COVID-19 pandemic, while a
new process for tenders has now been established in an attempt to reignite theindustry. The tender calls for 500MW focused on solar PV, wind and biomass,and 120MW focused on biogas and small-scale hydro power.49 More than 2GWof potential capacity has been bid into the process, with winning bids set to
be announced on 6 July 2023. They will secure 15-year supply contracts with
CAMMESA, the operator of Argentina’s wholesale electricity market.50

RECAI 61

Normalized index

In 2019, in the third round, a minimum price of US$54.22/MWh was achieved.51
The announcement of a fourth round comes at a time when Argentina is on
a trajectory for renewables to account for only 17.8% of total annual power
generation by 2025, short of its target of 20%.52 Industry experts hope thenext auction round will be expedited to restore confidence among investors andstakeholders.

PPA index

Key developments

Despite possessing abundant land and ideal conditions for solar and wind power
generation, these sources account for just 1.1GW53 and 3.3GW respectively.
They are dwarfed by thermoelectricity, which accounts for 25.3GW, andhydroelectricity, which provides 10.8GW.54 As Argentina looks to accelerate
renewable energy generation capacity, its transmission and distribution capacity
will need to be increased so the industry can reach its full potential.

Analysis

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

11

Key developments

31
Up 3

RECAI ranking

Norway: Seeking to harness emerging renewables
technologies
Norway has revealed plans to develop its offshore wind sector with a goalof reaching 30GW of capacity by 2040. In March, the government formallylaunched its first offshore tenders, including a 1.5GW fixed foundation andthree 500MW floating projects. The tender deadlines for the two projects
are the beginning of August and September 2023 respectively.55
As Norway embraces offshore wind, it has signaled its intention to develop
other emerging renewable energy technologies and green industry. In
January 2023, Norway and Germany signed a joint declaration to increase
the production of renewable energy through cooperation in hydrogen,battery technology, and carbon capture and storage.
Additionally, Norwegian state-owned Equinor will collaborate with German
utility RWE to create an industrial supply chain for low-carbon hydrogenproduction. Plans also include the construction of a €3b (US$3.3b)hydrogen pipeline to connect the two markets, which could begin deliveringhydrogen as early as 2030.56

36
No change

RECAI ranking

Vietnam: Offshore wind central to energy transition

Foreword

Vietnam is turning its attention to untapped potential in offshore wind thanks
to strong winds and relatively shallow waters near populated areas. The market
is now developing a regulation framework for the sector, which the World Bank
believes could generate up to 30% of Vietnam’s electricity output by 2050.

RECAI 61

A production target of 7GW from offshore wind by 2030 has been set, with thesector’s growth expected to accelerate and reach generation capacity of 64.5GW
by 2045.57 Vietnam also hopes that the development of its offshore wind capability
will spark growth in supporting industries and logistics services.

Normalized index

As part of its push to reach net zero by 2050, Vietnam has also joined the Just
Energy Transition Partnership, which includes a financing package of US$15.5b
offered by high-income countries to assist the market in shifting away from coal.58

PPA index

Key developments

Analysis

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

12Analysis

How market actions are impacting the global journey
toward net zero

Foreword

Domestic clean energy production is now a priority for governments around theworld, but will local ambition help or hinder the push for decarbonization?

In brief• Governments●
are eyeing
domestically produced, lowcost, low-carbon energy in abid to reduce their dependence
on imports and enhanceenergy security.
• The●
US Inflation Reduction Act
has accelerated investment
into clean energy (and otherdecarbonization investments),
but risks causing an imbalance
in international capital
allocation.
• Localized●
supply chains will
have to be rapidly built or
strengthened to meet
net-zero targets.

The global drive for energy security and a recessionary
environment mean the renewables industry has never
had a better opportunity to accelerate both demand forits products and progress toward net zero. Governments
are placing renewables, as well as traditional energy
sources, at the center of their energy policies, andlegislating for market interventions to address domestic
concerns about energy supply and affordability.
With geopolitical events such as the ongoing war
in Ukraine sending energy costs to record highs,
governments are keen to reduce their reliance on
imported energy and find ways to remove links between
natural gas and renewables pricing. The EU, for example,
is exploring how to decouple gas and electricity prices
as it works to accelerate the rollout of renewables andreduce its dependence on imported Russian gas via the
REPowerEU initiative.59 The UK is also looking at energy
reforms to delink gas and electricity prices.60
Interdependent legacy market dynamics are no longer
seen as sustainable, while domestically produced,
low-cost, low-carbon and, in some cases, low-leadtime energy — using local technology — looks more
attractive than ever.

The US, for example, is aiming to bolster its renewables
industry with the Inflation Reduction Act, a gamechanging piece of legislation that offers various
incentives, credits and grants for the development andcommercialization of green technologies. The Act risks
causing an imbalance in international capital allocation,
however — and localized supply chains will have to be
rapidly built or strengthened to achieve net-zero targets.
Expanding domestic supply chains could also be key toboosting markets’ broader economies, helping create
jobs, expand various industries and increase grossdomestic product, as well as enhance people’s welfare.61

RECAI 61

Normalized index
Greg Matlock

PPA index

EY Americas Energy Transition andRenewable Energy Leader

Contributors

Key developments

Andrew Horstead
EY Global Power & Utilities Lead Analyst
Stephanie Chesnick
EY Americas Strategy and Transactions
Energy & Resources Leader
Sonal Agarwal
Associate Partner, Strategy and Transactions,
EY Corporate Advisors Pte. Ltd
Bruno Bousquié
Strategy and Transactions Leader France,
Ernst & Young Advisory

Analysis

Regional focus

Michael Newman
EY Oceania Renewables Leader
Alex Lu
Associate Partner, Ernst & Young Hua Ming LLP

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

13

Analysis

Such goals will take time to realize, however.
Economic growth is forecast by the International
Monetary Fund (IMF), in its baseline scenario, tofall from 3.4% in 2022 to 2.8% in 2023, before
rebounding slightly to 3.0% in 2024.62 Gregory
Daco, EY-Parthenon Chief Economist, Strategy  
and Transactions, Ernst & Young LLP, commented:“Global growth continues to slow in the face ofelevated inflation, higher interest rates, tighter
financial conditions and the lingering impact of
the war in Ukraine. The threat of global financial
instability in the wake of the recent banking turmoil
is an additional risk clouding the outlook.”63
Despite such a slow-growth outlook, the investment
landscape for low-carbon technologies has
continued to evolve in recent years, as economies
recover from the impacts of the COVID-19 pandemic— and the resulting pressures on supply chains —while setting increasingly ambitious decarbonization
targets. After an initial steady double-digit growth,energy transition deal volumes exploded over thelast two years, with more growth expected as capital
continues to flow into the space. In North America,
deal volumes across all investor segments remained
strong in 2022 following 2021’s record year, thoughwith a modest reduction in overall volumes.64
Conditions, then, are ripe for turbocharging
renewable energy demand and accelerating thetransition to net zero — but will market interventions
underpin or undermine such ambition?

Inflation Reduction Act changes
the game
Perhaps the most significant policy when it comes torenewables expansion is the US Inflation Reduction
Act, which was signed into law by President Biden
on 16 August 2022. The White House described
the Act as “the most significant action Congresshas taken on clean energy and climate change in
the nation’s history”65 — and while its full impact will

not be felt for some time yet, the Act can alreadybe seen to be increasing renewable (and otherdecarbonization-related) investment opportunities
in the US. It prioritizes energy security and climatechange, which are due to get a combined investment
of US$369b.66
The Act is designed to drive “the development
and commercialization of new green technologies”
through three bespoke focus areas: accelerating
the energy transition (including improving market
competitiveness, efficiency and innovation);boosting domestic manufacturing; and increasing
the number of US jobs.
It is complementary to the Infrastructure Investment
and Jobs Act passed in 2021, which provides
US$1.2t in infrastructure funding over five years,
with a focus on grid resilience, EV infrastructuredevelopment and the reduction of greenhousegases. Some of the provisions in the Inflation
Reduction Act include US$30b worth of tax credits
allocated to the manufacturing of solar panels, windturbines, batteries and critical minerals processing.67
Tax credits and grants worth US$6b have also
been allocated to emission-reduction efforts byheavy polluters in industrial manufacturing. A
further US$10b in tax credits is available for thedevelopment of EV manufacturing and renewableenergy technologies, while US$30b in grants andloans is being allocated to help utilities transition
to clean energy. Additionally, the Greenhouse Gas
Reduction Fund is being established, with US$27b
worth of funding to support clean energy projects.
A broad range of assets — including wind, solar,energy storage, carbon capture utilization andstorage (CCS and CCUS), the production of cleanhydrogen, renewable natural gas, nuclear and
EVs — is set to benefit from the Act. Notably,
the legislation stands to make the US the world
leader in CCS and CCUS, while US-produced greenhydrogen could become the cheapest in the world68
under the updated tax credit regime. It will also be

possible for green hydrogen players to benefit froma combination of tax credits for renewable power
generation and clean hydrogen production.69
Expansion of the green hydrogen industry is
expected to have a knock-on effect on demand forthe renewable energy that it requires for production.
By 2030, US-based green hydrogen producers areprojected to need around 500GW of electrolyzer
capacity and roughly 750GW of solar and wind
power capacity to meet green hydrogen demand.70
Further, the Act includes a number of additional
mechanisms for developers of certain green energy
or low-carbon technologies to monetize the US tax
credits. In particular, the ability for a developer to“transfer” or “sell” certain US federal income tax
credits for cash (the receipt of which is tax-free) is agame changer, and it is having an immediate impact
on financing and project development. Additionally,some tax-exempt investors, government entities andcertain other entities may be eligible for a newly
established “direct pay” regime — an additionalmonetization valve that aims to enhance the capital
attractiveness of certain green energy-related
investments.71
Despite it being early days for the Act, investors
are already coming forward to take advantage ofthe incentives it offers. In the first eight months
since its passage in mid-August 2022, more than
US$150b of capital investment into utility-scale US
clean energy was announced, surpassing the total
investment estimated for all clean energy projects
commissioned in the market over 2017–21.72
Over the same period, 46 new utility-scale clean
energy manufacturing facilities were announced,
with these estimated to create more than 18,000
domestic jobs. Of these 46 projects, 26 are solar
manufacturing facilities. A further 10 projects
are utility-scale battery storage manufacturing
facilities or expansions, and 10 are wind power
manufacturing facilities.

So far, the Act appears to be making progress onachieving its stated goals, and this looks set tocontinue as investors seek to take advantage of thetax credits, grants and other economic incentives.
Certain technology-specific investment andproduction tax credits have been extended by the
Act through 2024, but will then be replaced withtechnology-neutral clean energy tax investment
and production tax credits.73 With respect to the tax
credit for the production of clean hydrogen, or thetax credit available for the capture and sequestrationor use of qualified carbon oxides, such projects
may qualify for the updated incentives as long as
the construction of the applicable facilities began
before 1 January 2033 (in addition to meeting otherrequirements).74

Foreword

RECAI 61

Normalized index

PPA index

Key developments“

Global growth continues to slow
in the face of elevated inflation,higher interest rates, tighter
financial conditions and thelingering impact of the war in
Ukraine. The threat of global
financial instability in the wakeof the recent banking turmoil isan additional risk clouding theoutlook.

Regional focus

Data andmethodology

Contacts

Gregory Daco
EY-Parthenon Chief Economist, Strategy
and Transactions, Ernst & Young LLP

Renewable Energy Country Attractiveness Index 61

Analysis14

Analysis

Significantly, the Act is expected to result in newinvestment opportunities throughout the energy
and manufacturing supply chain, not just in
specific renewables projects and technologies, as
it seeks to promote domestic manufacturing of thecomponents required for clean energy production.
The Act is expected to drastically increase thedemand for components needed for clean energy
technologies. But some of the incentives hinge ona certain amount of raw materials being sourced in
the US, the final product being constructed in theUS, or meeting apprenticeship and prevailing wage
standards.
To accommodate the increased participation
by investors — and to develop the supply chainsneeded for newer technologies, new technologyspecific economies and increased domestic energy
production — new commercial structures and joint
ventures are being created. Although an ambitious
undertaking, the Act’s inclusion of additionalmonetization options, and the credits, incentives
and grants available, is driving US development.
What is left to be seen, however, is what the Act’s
impact will be on international markets.

Implications for global markets
The Act has implications on a global level, as it
is likely to result in at least some distortion of
global markets. The concern among European
politicians and policymakers, for example, is that
it will incentivize developers and manufacturers tolocate investments in the US and away from Europe.

Similar concerns have emerged elsewhere in theworld, and governments are examining the impact
and formulating their responses at the policy level.
In 2022, the US accounted for 13% of global
renewables capacity, excluding hydro, whereas
China and the EU held shares of 38% and 21%
respectively.75 As other economies push to expand
their own renewables industries, the Act looks set
to more than double installed capacity in the US.
The total US renewable energy capacity, excluding
pumped hydro facilities, is 385GW. The American
Clean Power Association estimates that investments
driven by the Act could deliver an additional
525GW to 550GW of clean power for the US by
2030, generating US$550 to US$600b of capital
investment.76
While renewables investment continues to increase
worldwide, it still falls short of what is needed. The
International Renewable Energy Agency (IRENA)
has estimated that US$35t of investment is neededby 2030 to keep global temperature rises to within
1.5ºC of pre-industrial levels.77 The US, China andthe EU accounted for two-thirds of all renewablecapacity additions in 2022,78 and the Act’s passage
into law intensifies the competition for capital, as
well as highlighting the need to incentivize green
energy to attract capital in developing markets.
Aside from India and China, clean energy spendingin emerging and developing markets remains
stuck at 2015 levels. These markets account for
one-fifth of all global energy investment, and,within many of these economies, public funding

accounts for around 50% of energy investment.
With the high cost of capital and rising borrowing
costs threatening to undercut the economic
attractiveness of capital-intensive clean energy
technologies, increased competition from leading
renewables markets could make it more challenging
still for emerging and developing economies toattract investment from the private sector.

Foreword

RECAI 61

Normalized index

Of significance,
the US Inflation Reduction
Act is expected to result in
new investment opportunities
throughout the energy andmanufacturing supply chain,
not just in specific renewables
projects and technologies,
as it seeks to promote
domestic manufacturing of thecomponents required for clean
energy production.

PPA index

Key developments

Analysis

Regional focus

Data andmethodology

US$35tContacts

worldwide investment IRENA says is needed by 2030 to keep
global temperature rises within 1.5°C of pre-industrial levels
Renewable Energy Country Attractiveness Index 61

15

Analysis

Indeed, there is already significant interest among
investors based elsewhere in the deployment of
future capital expenditures in the US, as illustrated
by the presence of foreign companies among thoseannouncing new US clean energy investments inthe first eight months following the passage of theAct. These include Italy’s Enel, which is investing ina facility for the manufacturing of solar panels andcells.79 Meanwhile, Germany’s RWE has announced andcompleted the acquisition of Con Edison Clean Energy
Businesses, which it said makes it the number four
renewable energy company in the US.80 And EE North
America, a subsidiary of Denmark’s European Energy,
unveiled plans to develop 10GW of renewable energy
in the US by 2026.81 Others, including automakers
Volkswagen,82 BMW83 and the Mercedes-Benz Group,84
battery producer Northvolt85 and industrial gas player
Linde,86 have indicated in recent months that they arefocusing more on their North American businesses.
The EU’s response — both to date and planned — isimportant, as recent market interventions can make
Europe less attractive for investors. Analysis by theEuropean Parliament estimates that revenue from thetemporary windfall tax on energy companies’ profits,
applied in 2022 by setting a cap on market revenues
for renewable generators, so far amounts to €30.9b(US$34.1b) from onshore wind, €16.7b (US$18.4b)from biomass and €7.9b (US$8.7b) from offshore
wind.87 As the bloc unwinds decades of Russian gas
dependency by expanding renewables, hydrogen andbiomethane,88 its market design proposals must ensurethat the ability to continue to attract investment isn’t
undermined.

The EU is under pressure from the private sector andMember States to do even more. Indeed, companies,
including steelmaker ArcelorMittal, are calling on the EU
to simplify its approvals process for green investments
and provide more incentives to keep the region
competitive with the US.89 Given the challenges involvedin achieving consensus across the bloc, however — andthe amount of time this can take — individual markets
are also having to pursue their own initiatives to bolster
their attractiveness to renewables investors.

zero industry.”93 The proposals included the relaxationof state rules to drive funding, the Net-Zero Industry
Act, the enhancement of skills, and open trade aimed
at ensuring resilient supply chains. Then, in March
2023, the European Commission approved a significant
relaxation of state aid rules94 under the Temporary
Crisis and Transition Framework, amid concern thatcompanies would favor investment in the US because of
the Act. The European Commission amended the EU’s
state aid rules to simplify the approval of subsidies in six
key areas — batteries, solar panels, wind turbines, heat
“My view is that, today, the reactions to the US
pumps, electrolyzers and carbon capture technology
Inflation Reduction Act are more country-led, rather— as well as for the production of the components andthan European Commission-led,” said Bruno Bousquié,
raw materials needed to manufacture them.95 The move
Strategy and Transactions Leader France, Ernst & Youngis aimed at giving EU Member States more flexibility
Advisory. He cites Germany as one of the European
to inject public money into clean energy and, thereby,
economies leading the way. The German Federal
provide additional incentives to private sector players.
Ministry for Economic Affairs and Climate Action hasprioritized investment and innovation support measures However, there have also been warnings that the EU
to strengthen its renewable energy and power gridshould not rush to replicate the Act, as this could serve
production capacity. This includes enabling access toto distort the market further still and undermine thefinance, offering hedging instruments and promoting
bloc’s existing mechanisms for incentivizing the build90
innovations.
out of renewables. There has been debate among EU
Member States on how to respond to the Act in such a
Globally, Germany and France are third and fourthmanner that it does not negatively affect local markets,
respectively in terms of annual investment into thesuggesting that a more carefully thought-out approachenergy transition.91 In February 2023, France adopted
is needed. For example, while France, Germany, Italya new renewable energy bill aimed at helping it achieve
and Spain have been among those advocating for morea tenfold expansion in solar energy output to exceed
flexible and quicker procedures to grant state aid,
100GW by 2050 and to roll out 50 new offshore
Nordic countries, the Netherlands and several Central
windfarms to reach a capacity of 40GW.92
and Eastern EU Member States are wary that relaxing
Nonetheless, the EU continues to pursue bloc-widestate aid rules would only benefit a few EU Member
initiatives. In February 2023, the European Commission States with deeper pockets while damaging competition
proposed its Green Deal Industrial Plan, with the aim
within the 27-nation bloc.96
of “enhancing the competitiveness of Europe’s net-

Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus

Data andmethodology“

Contacts

My view is that, today, the reactions to the US Inflation Reduction Act
are more country-led, rather than European Commission-led.
Bruno Bousquié
Strategy and Transactions Leader France, Ernst & Young Advisory
Renewable Energy Country Attractiveness Index 61

16Analysis

Outside the EU, as it pursues its own energy
transition, the UK is also looking at how to remaincompetitive with the US in the wake of the Act.
In March 2023, for example, the UK unveiled apackage of measures aimed at spurring investment
in CCUS, offshore wind, green hydrogen, and otherclean energy industries and initiatives.97
Beyond Europe, major players, including India andChina, are pursuing the aggressive growth of theirown renewables industries. For example, India
is expanding via a combination of government
targets and private sector actions, although Indian
firms will also be open to the new US investment
opportunities provided by the Act. (See page 18,
regional focus article.)
China’s response will be significant, given its current
dominance across a wide range of clean energy
supply chains, including wind and solar components,
batteries and critical minerals. A major goal of the
Act is to improve US competitiveness with China
across those supply chains.

“At the same time, China is focused on aggressively
expanding its renewables industry as it seeks torebound from almost three years of pandemicrelated lockdowns and the impact they have had on
the economy. Chinese growth is forecast by the IMF
to rebound to 5.2% this year,98 and this comes as
the market steps up its pursuit of energy transition
targets. Beijing is aiming for carbon neutrality
by 2060, and this target will help drive domestic
demand for renewables and clean energy. Further,
China appears set to continue dominating the solar
components industry for some time. Chinese players
are also targeting export markets globally, and theirefforts to be competitive could drive costs lower.
“China is taking measures to retain its competitive
advantage — for example, in technologies where it isreally leading the market,” said Alex Lu, Associate
Partner, Ernst & Young Hua Ming LLP. He added that
China’s competitive advantage has previously beencost-led rather than technology-led.
Elsewhere in Asia, markets such as Malaysia, which
has a solar manufacturing industry and exports to
the US, stand to be affected by the introduction of
the Act. Others in the region, including Indonesia,
want to establish a new solar manufacturingindustry and will need to consider how to do so in
the face of competition from significantly larger
economies, including the US and China — thelatter of which supplies solar panels to much ofSoutheast Asia.

China is taking measures to retain
its competitive advantage — forexample, in technologies where it
is really leading the market.
Alex Lu
Associate Partner, Ernst & Young Hua Ming LLP

In Australia, federal and state governments
recognize that the Act is likely to have an impact
on their investment landscape, though the extent
of this remains uncertain. Indeed, companies
that were considering Australia for investments
in green hydrogen are rethinking their plans inlight of the Act’s ability to bring down the costs ofproduction in the US. In comparison, Australia’scompetitiveness in the nascent green hydrogenspace now looks reduced.
Nonetheless, federal and state governments
in Australia are keen to demonstrate that theirmarkets remain open for business, and that further
support for renewables is likely to materialize in the
future. This is especially the case as Australia has
an aggressive target for 82% of its power generation
coming from renewables by 2030.99
Indeed, the Australian government recently
introduced the Capacity Investment Scheme, whichis initially focused on providing capacity incentives
to energy storage projects. “There is still, I think, apotential revenue gap for storage projects, becauseof the range of revenue streams. So that is thefirst lever, and there is also a question mark overwhether a broader capacity investments scheme
could be brought in to help renewable energy froma global attractiveness perspective,” said Michael
Newman, EY Oceania Renewables Leader.

A win for the energy transition
Increased competition represents a win for theenergy transition, while also benefiting thosemarkets that turn to renewables to drive theireconomies out of the recessionary environment withwhich they are currently dealing.
The US wants to accelerate growth and has set
the stage for a major expansion of its renewables

industry. Other major economies, faced withincreased competition from the US, will seek todouble down on their own renewables investments
and take steps to enhance their competitiveness.
Increased competition can help speed up
technological advances and bring down costs,
which should benefit the energy transition acrossthe board and help spur the investment required todecarbonize and keep global temperature rises incheck. The considerable acceleration of the learning
curve for nascent green technologies, thanks to theAct, stands to be to everyone’s benefit globally.
On the other hand, market leaders will have tonavigate carefully if they are to avoid significant
setbacks. The Act has been the subject ofinternational criticism for its protectionist measures,and it could run into further pushback if it does not
evolve to become less disadvantageous to foreigncompanies and components. Similarly, renewables
supply chains span markets and continents, so any
attempt to shift them significantly will be costly
and time-consuming. And markets that currently
dominate supply chains, such as China, will befocused on remaining competitive and retaining
their dominance.
Unless potential issues with localized supply chainsare addressed correctly, net-zero targets could be
missed, and the global energy transition delayed.
The path forward will not be without risks andpressures, and policies and incentives will needto evolve further still to adapt to new market
distortions. Over time, some of the Act’s current
provisions stand to be phased out, and unlessthese are extended, or new ones brought in, this
could help level the playing field in the longer term,
improving the comparative attractiveness of othermarkets again. Governments can help set the stage
for this by taking carefully considered steps now.

Renewable Energy Country Attractiveness Index 61

17

Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus

Data andmethodology

Contacts

Regional focus

India: working round the clock to cement
investible position in renewable energy

Foreword

India’s renewables industry is growing rapidly. According to the International Energy Agency(IEA), India has the fastest rate of renewable electricity growth of any major economy, withnew capacity additions on track to double between the start of 2022 and 2026.100 It also
doubled between 2015 and 2022, to reach 163GW.101 As of February 2023, renewables
accounted for around 42.5% of India’s installed power generation capacity.102

In brief• India●
has the fastest rate ofrenewable electricity growth ofany major economy, with solar
leading the transition.
• Commercial●
and industrial
companies are turning to
renewable power purchaseagreements to lower theirelectricity costs and emissions.
• Ensuring●
round-the-clock supply
is a priority as India seeks to
become a major producer andexporter of green hydrogen.

India’s renewable energy industry is expanding
via a combination of government targets andprivate sector actions. Solar, in particular, hascontinued to take significant strides forward. In
2022, it accounted for 63GW of the market’s
total renewables capacity, followed by renewablehydropower, at 47GW, and wind power, at 42GW.103
The private sector — and C&I companies in particular— is increasingly turning to renewable PPAs as it
seeks lower-cost electricity while simultaneously
pursuing lower emissions. However, the growing
share of renewable power generation means that
supply intermittency is also becoming a bigger
concern. Solar — which is expected to continue toplay a dominant role in India’s energy mix — andwind are closely associated with intermittency
issues, which, unless properly managed, can strain
power grids. As a result, ensuring round-theclock (RTC) supply is becoming more of a priority.
Pumped hydro is expected to play a significant rolein this. According to IRENA, India’s pure pumped

RECAI 61

Normalized index

storage capacity of 4.8GW has remained unchanged
since 2013.104 This is likely to increase in the
coming years, however, with major new projects
under development.
“With increasing adoption of renewable electricity
across private sector and commercial and industrial
consumers, intermittency and nonavailability of RTC
power is a growing concern,” says Somesh Kumar,
EY India Power & Utilities Leader. “Pumped hydrostorage can play a significant role in ensuring RTC
power to consumers.”
In addition, new and upcoming technologies, suchas green hydrogen, are making their way into thedomestic renewable energy mix, to the extent
that they can boost India’s export advantage. This
reinforces the importance of RTC supply of usableclean energy for potential offtakers. Policies toboost market participation are gradually taking
center stage, and the renewables market has
attracted large pension funds lately.

PPA index

Key developments

Somesh Kumar

Analysis

EY India Power & Utilities Leader

Contributors
Kapil Bansal
Partner, Ernst & Young LLPRegional focus

Kiran K. Malla
Partner, Ernst & Young LLP
Pankhuri Neb
Senior, Ernst & Young LLP

Data andmethodology

Contacts

108GW

India’s total amount of pumped storage
potential, according to the government
Renewable Energy Country Attractiveness Index 61

18

Regional focus

These priorities are leading to clear policy actions
designed to boost storage and hydrogen and unlock
barriers for corporate players. Interest in investingin India’s energy market — and its renewables
industry in particular — is already rising andexpected to grow further still. In addition to large
pension funds, investments have flowed in via a mixof deals, including acquisitions, bonds, debts, equity
investment and mezzanine funding.105

Government incentives and targets
In the fourth quarter of 2022, India released its
long-term low-carbon development strategies
through its latest draft National Electricity Plan
(NEP). The NEP sets out decarbonization targets
for the power sector up to 2031–32. It also setsout plans to expand the transmission infrastructure
network by 300GW by 2030, to allow for effective
power transmission from areas of high renewableenergy generation. The market is aiming to have
500GW of renewables capacity by 2030106 andnet-zero greenhouse gas emissions by 2070.
Meanwhile, under its recently launched National

Green Hydrogen Mission — which has an initialoutlay of INR197b (US$2.4b) — India is targetingproduction of five million metric tonnes of greenhydrogen by 2030.107
The government has allocated INR350b (US$4.3b)
to “priority capital investments toward energy
transition and net-zero objectives, and energy
security” in its 2023–24 budget.108
To date, India has had considerable success indriving growth in certain areas. It is a major hub
for the manufacturing of components required forwind power generation — indeed, it is one of only
five markets that can currently produce all six major
wind turbine components.109 It is also promoting thedomestic manufacturing of components required
for solar generation. Under the Production Linked
Incentive Scheme for High Efficiency Solar PV
Modules, for example, the government had allocated48.3GW of domestic solar PV module manufacturing
capacity by the end of March 2023, with cumulative
support of INR185b (US$2.3b).110 This capacity
is due to come online by April 2026. However,increases in domestic manufacturing capacity need
to be accelerated to meet the market’s renewableenergy goals, especially in light of the taxes imposed

To date, India has had considerable success indriving growth in certain areas. It is a major hub
for the manufacturing of components required
for wind power generation — indeed, it is one of
only five markets that can currently produce all six
major wind turbine components.

on imported solar modules and cells in 2022.111
As of early 2023, cell and module manufacturing
capacity in India was around 44GW per year,112 while
the market is targeting 280GW of installed solar
power capacity by 2030.113 In addition, emphasis on
research and development through the Advanced
Chemistry Cell scheme has been pivotal in exploringindigenized, higher-efficiency solar cells.
“India is making significant efforts to establish itself
as an attractive and investible market for renewableenergy,” says Kumar. “The Indian government has
been implementing various policies and initiatives topromote renewable energy development and attract
both domestic and foreign investments.”

C&I segment pursues PPAs
The emergence of C&I PPAs means the industry will,
to some extent, rely on the government to allow it
to advance with its plans, because these customers
would otherwise be supplied by state-owned
utilities and require approvals to obtain power fromalternative sources.
The PPAs in question are typically for RTC supply,
so it is up to the suppliers of the power sold underthese deals to complement renewable sources ofenergy with storage capacity.
These C&I customers have their own net-zeroemissions targets and, in pursuit of these, areseeking to sign PPAs under India’s open-accessmechanism. Another key reason for the growth of
PPAs is the high grid tariffs associated with coalderived energy and the fact that renewable energy
is now widely available in India.114
From the other side, capital is also chasing these
agreements, with competition in utility-scaletenders and increased interest by private equity
players because of better returns and sovereignguarantees. Indeed, the market has evolved from acapital standpoint, and the emergence of C&I PPAs
— especially involving solar power — has helped bring
down the costs for power in some cases, comparedwith what customers would be able to buy fromthe grid. This has not been the case everywhere,
however, with only some states viable for open
access. In most, open-access power remains more
expensive than power supplied by state distribution
companies.

Foreword

The open-access market for renewable energy
grew to around 10GW by the 2022 fiscal year,
from 300MW in 2009.115 It currently accounts fora minority of consumers, but India is one of thefastest-growing PPA markets in the world, and it
could increase faster still if policies across different
states became more standardized.

Normalized index

The only thing that can slow the momentum is thegovernment’s reluctance to provide approvals for
C&I PPAs to proceed. Overall, momentum remains
strong, but, in some states, approvals have beenslow. Nonetheless, government enablement, the pullfrom customers to shift to renewables and the factthat capital is increasingly chasing C&I platforms
mean renewable capacity continues to expand.

Key developments

Growing storage needs
To keep pace with the growth in renewablegeneration and transmission capacity, and help
ensure RTC supply, energy storage systems need
to be put in place. Recently, India appears to havebeen moving away from battery-based storage andtoward pumped storage, given the potential scaleof projects, their environmental credentials andthe availability of the necessary technology. The
Ministry of Power published draft guidelines on
promoting pumped storage in February 2023116 —but this preference could change if the economics
shift, as battery storage costs are expected to fall
over time.

Renewable Energy Country Attractiveness Index 61

19

RECAI 61

PPA index

Analysis

Regional focus
Data andmethodology

Contacts

Regional focus

Several large-scale pumped hydro projects havebeen announced by private sector developers,though these have long lead times and the potential
to run into delays because of their scale andcomplexity.
The government will be keen for these to move
forward, however, given that it recently estimatedthe market will require 18.8GW of pumped hydrostorage and 51.5GW of five-hour battery storage
to integrate the 500GW of renewable capacity
it is targeting to bring online by 2032.117 India
has 108GW of pumped storage potential in total,
according to the government. As of February
2023, only eight projects were in operation, with a
combined capacity of 4.7GW. A further 24 projects,
with a combined capacity of 26.6GW, are underdevelopment.118

Hydrogen export potential
India is aiming to become a low-cost renewables
production center, with a view to targeting export
markets as well as domestic consumption. Withcheap renewable power generation, it will also aim
to provide RTC renewable power supply to facilitate
green hydrogen and ammonia exports. Currently,hydrogen incentives in India are not sizable,
especially compared with the US and its Act, but
India is banking on the US prioritizing domestichydrogen consumption, while it can target export
markets such as Europe.
Indeed, India is aiming to become a global hub inthis space,119 citing in its National Green Hydrogen
Mission120 both a need to achieve self-reliance forenergy and its desire to contribute to the energy
transition globally. If India achieves its goals, it will
reduce its dependence on fossil fuel imports, andhelp it become a technology and market leader ingreen hydrogen. However, India is currently thethird-largest consumer and net importer of crude
oil and petroleum products in the world,121 and its
energy demand is expected to keep growing, putting

the market under pressure to displace more of its
demand for fossil fuels with renewables. It is also
the world’s fourth-largest buyer of liquefied naturalgas (LNG),122 importing an estimated 212.4 million
metric tonnes of crude and 30.8b cubic meters of
LNG over the 2021–22 fiscal year.123
The Green Hydrogen Mission proposes to expand
India’s nascent green hydrogen industry in a phasedmanner, first focusing on deploying it acrosssectors that use less clean forms of hydrogenand developing an ecosystem for research anddevelopment, regulations and pilot projects. IRENA
estimates that India currently consumes six million
metric tonnes per year of hydrogen, most of it greyhydrogen, which is produced using fossil fuels.124
Ramping up domestic electrolyzer manufacturing
capacity will also be an early priority.
Progress is also being made on plans for green
ammonia exports. In February 2023, Greenko
signed an MoU, paving the way for negotiating afirst-of-its-kind deal to supply green ammonia to
Germany’s Uniper. The integration of a pumped
storage plant to help ensure reliable and competitive
supply was highlighted at the time as a key
differentiator for that project.

Next steps to boost renewables
growthThe Indian government’s policy push on renewables
is in line with the global trend of customers
demanding procurement from renewable
developers. There are push and pull factors involved,
and new investors are emerging to take advantageof the opportunities available.
The market will have to consider when it should
provide more subsidies to renewables as industry
players increase their operations. Between 2014
and 2022, subsidies for coal, fossil gas and oil
fell by 76% in real terms, but they remain morethan four times the subsidies for renewables andEVs, at INR138.87b (US$1.9b).126 Such continued
support for fossil fuels is out of step with India’senergy access, energy security and climate change
objectives. If the government is to achieve its
commitment of 500GW of renewable capacity by
2030, it is estimated that a doubling of investment— to INR2.44t (US$28b) per year — will be required
between 2022 and 2029.127
Maintaining the growth momentum of renewables
will also come down to private sector interest,and financial incentives could help boost this.
Additionally, a balance will need to be struck
between broader efforts to keep the renewablesbuild-out going and the push to expand domestic
manufacturing capacity, should it not keep pace withoverall renewables growth.

Meanwhile, further standardization of processes
for open access across India’s states would be
required to help the C&I sector specifically to growmore quickly.
The green hydrogen industry is still nascent,with considerable uncertainty ahead. However,substantial opportunities are presenting themselves
as a growing number of markets look ahead toimporting green hydrogen over the longer term.
With energy demand growing, the pressure will
be on to keep fossil fuel consumption in check.
Renewables, storage and an eventual role in
the green hydrogen supply chain are integral
and complementary components in achieving
this, and the Indian government is stepping up
support for all three.

Foreword

RECAI 61

Normalized index

PPA index

Key developments“

AnalysisWith increasing adoption of renewableelectricity across private sector andcommercial and industrial consumers,
intermittency and nonavailabilityof RTC power is a growing concern.
Pumped hydro storage can play asignificant role in ensuring RTC power
to consumers.

Regional focus
Data andmethodology

Contacts

Somesh Kumar
EY India Power & Utilities Leader

Renewable Energy Country Attractiveness Index 61

20

Data and methodology

RECAI 61 scores
Ranking

MarketTechnology-specific scores

Previous
rankingMovement vs.
previous

Score

Onshorewind

OfffshorewindSolar PV

Solar CSP

Biomass

Geothermal

Hydro

Marine1

United States

1

72.9

58.3

50.7

58.5

46.5

40.4

46.8

39.5

20.6

2

Germany

3

72.3

56.4

43.2

57.2

32.3

50.4

37.1

41.6

21.1

3

China Mainland

2

70.7

53.3

45.2

61.6

55.2

49.6

24.3

50.9

17.9

4

United Kingdom

4

69.8

58.3

52.5

49.8

15.7

54.9

36.3

39.9

35.4

5

France

5

69.6

55.4

44.1

54.9

24.0

46.4

39.0

42.1

38.6

6

India

7

69.1

53.9

24.5

62.9

34.5

43.4

22.0

48.1

20.1

7

Australia

6

68.7

53.5

33.4

56.9

46.7

41.1

15.5

26.9

25.4

8

Spain

8

66.0

52.8

27.1

53.6

29.4

40.0

15.7

23.4

23.3

9

Netherlands

10

64.0

53.6

38.8

46.9

15.8

51.1

24.7

27.6

16.6

10

Japan

9

63.9

50.0

42.0

48.8

19.3

56.0

44.8

38.0

23.3

11

Denmark

11

63.8

53.5

42.0

46.3

16.8

44.3

15.8

21.7

21.5

12

Canada

15

63.8

56.8

38.5

46.8

19.3

35.5

25.8

47.4

26.4

13

Ireland

13

62.7

50.1

35.9

46.2

19.9

36.2

18.1

22.1

24.9

14

Chile

17

62.4

51.9

22.6

48.3

55.0

42.4

46.1

45.2

28.1

15

Italy

12

62.3

47.2

34.0

50.8

31.1

41.8

32.3

45.7

18.4

16

Greece

16

62.2

49.5

33.3

49.1

35.8

43.4

25.5

41.6

15.1

17

Poland

18

62.0

48.9

41.6

49.2

13.7

45.7

19.9

36.2

14.5

18

Brazil

14

60.7

51.3

31.8

52.0

24.6

49.6

12.7

47.6

18.4

19

Israel

21

60.6

40.1

15.8

55.3

36.9

29.2

15.3

18.3

15.5

20

Sweden

20

59.5

49.1

31.9

42.4

15.9

43.5

18.4

36.2

27.4

Renewable Energy Country Attractiveness Index 61

Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus
Data andmethodology

Contacts

21

Data and methodology

RECAI 61 scoresTechnology-specific scores

Ranking

MarketPrevious
ranking

21

Finland22

Movement vs.
previous

Score

Onshorewind

OfffshorewindSolar PV

Solar CSP

Biomass

Geothermal

Hydro

Marine

22

59.0

59.8

28.0

36.1

15.7

45.0

15.7

23.0

15.7

Portugal

25

58.6

43.6

19.6

47.7

25.4

40.4

23.3

37.0

24.0

23

Morocco

19

58.6

46.2

17.2

50.6

50.2

25.0

13.8

33.9

13.8

24

Belgium

24

58.5

51.1

29.1

41.9

18.4

41.1

22.7

25.6

18.0

25

South Korea

23

58.0

39.3

32.7

49.0

18.7

48.6

17.1

29.8

32.9

26

Taiwan

28

57.8

42.6

38.7

45.7

18.7

29.6

23.9

33.4

27.7

27

Turkey

30

57.3

49.3

21.3

48.8

23.9

41.3

41.9

45.6

19.8

28

Egypt

29

56.7

45.7

15.3

54.2

35.2

24.9

11.9

23.4

11.9

29

Austria

32

56.6

46.0

21.0

43.4

14.1

41.9

17.5

39.8

21.2

30

Argentina

26

56.5

50.8

22.1

48.5

31.5

36.0

18.0

34.4

17.6

31

Norway

34

56.5

48.9

33.5

39.0

14.9

32.8

17.4

46.0

32.8

32

Kazakhstan

35

56.2

48.5

16.4

45.6

18.1

34.8

16.3

41.5

13.8

33

Philippines

27

56.1

41.9

20.8

47.4

20.0

40.0

43.1

41.8

20.2

34

Switzerland

31

55.7

41.3

17.9

44.3

18.4

35.9

22.8

38.8

15.3

35

Mexico

33

55.3

42.2

21.4

47.6

24.5

34.5

39.7

35.1

19.1

36

Vietnam

36

54.4

44.6

34.1

43.4

17.5

38.8

13.0

46.5

18.6

37

South Africa

37

54.4

47.2

18.3

44.9

47.1

31.4

12.6

19.8

20.7

38

Thailand

40

52.9

38.9

15.4

44.3

21.6

41.3

16.6

31.7

18.6

39

Saudi Arabia

41

52.9

45.3

16.1

44.8

28.1

25.9

15.8

12.1

11.8

40

Jordan

38

52.9

43.6

16.3

44.2

30.3

23.2

13.2

15.4

13.2

Renewable Energy Country Attractiveness Index 61

Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus
Data andmethodology

Contacts

22Data and methodology

RECAI 61 methodology

Foreword

The index rankings reflect our assessment of the factors driving
market attractiveness in a world where renewable energy has gone
beyond decarbonization and reliance on subsidies.
We have defined the questions being asked, based on what
we see as global market trends affecting investment anddeployment priorities, and the challenges and success factors
impacting EY clients:• Is● there a long-term need for additional or replacement
energy supply? If so, is there a strong case for energy fromrenewable resources in particular?
• Is● policy hindering or helping the ability to exploit
renewables opportunities?
• Are●
essential components in place to ensure projectdelivery, such as long-term contracts, grid infrastructure(including storage) and availability of finance?
• What●does the strength of natural resource, track recordand project pipeline reveal about the outlook for particularrenewable technologies?
• Even●if all other elements are in place, does the macro
stability and investment climate enable or impede the easeof doing business?
These index pillars therefore put emphasis on fundamentals
such as energy imperative, policy stability, project delivery(including capital availability) and diversity of natural
resource — factors that will increasingly become key market
differentiators as markets move toward grid parity, and“artificial” motivations, such as government targets or the
ring-fencing of technologies, become less critical.

RECAI 61

Determining the rankings
Each parameter within the five pillars comprises a seriesof data sets that are converted into a score, from one tofive, and weighted to generate parameter scores. These
are weighted again to produce pillar scores, then an overall
RECAI score and ranking. Weightings are based on the EY
assessment of the relative importance of each data set,parameter and pillar in driving investment and deployment
decisions. Each technology is also allocated a weighting basedon its share of historical and projected investment levels.

Normalized index

PPA index

Key developments

Separate from the main index, EY technology-specificindices rankings reflect a weighted average score acrossthe technology-specific parameters, and a combined scorecovering our other macro and energy market parameters.
This is because some markets may be highly attractive for
specific technologies but face other major barriers to entry.

Analysis

Data sets are based on publicly available or purchased data,
EY analysis or adjustments to third-party data. We are unable
to publicly disclose the underlying data sets or weightings
used to produce the indices.

Regional focus

If you would like to discuss how EY RECAI analysis could help
your business decisions or transactions, please contact the
RECAI advisor Lavaanya Rekhi.

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

23

Data and methodology

Normalized RECAI methodology

Foreword

With the largest global markets tending to top the core RECAI, there are many smaller markets whererenewable energy is growing rapidly and becoming highly attractive. By dividing a market’s RECAI
score by logarithm of GDP to produce a “normalized score,” the index identifies those smaller renewableenergy markets that perform best on the core RECAI pillars of energy mix, government support, projectdelivery and natural resource. Removing a market’s economic size showcases those that are efficientin terms of their size and the most attractive for investors. The normalized index also highlights larger
markets that score well in the core RECAI but could be doing more to support the green transition.

RECAI 61

Normalized index

See the normalized index ranking on page 5.

PPA index

Key developments

Analysis

Regional focus
Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 6124

Data and methodology

PPA Index scores
Ranking Market

Previous
rankingMovement vs.
previous

Normalized
score (0–100)

PPA Index
score

PPA market
maturity

PPA future
market score

PPA policy
score

RECAI
score

1

Germany2

100.0

24,718,483

71.3

88.3

54.3

72.3

2

Spain

1

98.9

24,435,816

80.9

89.7

51.0

66.0

3

United States

3

92.8

22,948,409

100.0

55.5

56.7

72.9

4

United Kingdom

4

85.5

21,132,502

68.9

82.1

53.4

69.8

5

France6

71.3

17,622,052

62.0

81.0

50.4

69.6

6

Australia

5

69.6

17,194,182

79.3

54.2

58.2

68.7

7

India

8

69.2

17,097,777

72.1

51.0

67.4

69.1

8

Denmark

7

64.6

15,961,744

59.8

82.0

51.0

63.8

9

Netherlands

9

59.3

14,650,800

59.1

75.9

51.0

64.0

10

Poland15

57.4

14,195,090

63.0

65.3

55.6

62.0

11

Sweden10

56.6

13,994,285

63.3

76.1

48.8

59.5

12

Finland

11

56.1

13,867,500

64.4

68.8

53.0

59.0

13

Italy

12

53.4

13,198,559

51.2

82.2

50.4

62.3

14

Brazil13

44.2

10,929,447

78.5

54.0

42.4

60.7

15

Norway14

43.0

10,632,699

60.0

63.4

49.5

56.5

16

Japan

24

35.2

8,691,937

54.2

48.0

52.3

63.9

17

Chile

17

31.3

7,727,267

60.4

39.1

52.5

62.4

18

Portugal

16

27.5

6,801,790

34.4

65.6

51.5

58.6

19

Ireland23

26.4

6,529,299

50.6

35.9

57.4

62.7

20

South Africa

19

26.2

6,479,559

60.8

36.5

53.7

54.4

21

Colombia

21

23.1

5,720,006

59.4

40.0

49.2

49.0

22

Egypt

18

22.9

5,649,491

46.9

38.8

54.7

56.7

23

Belgium

22

20.7

5,104,547

54.9

31.8

49.9

58.5

24

Morocco20

20.5

5,070,665

39.3

37.4

58.8

58.6

25

Thailand26

14.4

3,569,552

47.0

23.3

61.5

52.9

26

Greece27

14.4

3,554,512

32.6

35.1

49.9

62.2

27

Ethiopia25

12.7

3,151,254

36.0

35.0

58.9

42.4

28

Romania28

10.3

2,553,006

26.7

34.9

53.2

51.5

29

Lithuania

29

8.0

1,982,618

32.2

33.7

50.5

36.1

30

Austria7.8

1,940,366

19.9

34.3

50.3

56.6

Renewable Energy Country Attractiveness Index 61

Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus
Data andmethodology

Contacts

25

Data and methodology

PPA market maturity

PPA Index methodology
By analyzing the same 100 markets as in the full RECAI database, the goal is to create a
new ranking that focuses on the attractiveness of renewable power procurement — via
offsite corporate PPAs — rather than the attractiveness of renewable project investment.
The final score for the top 30 markets is calculated from aweighted combination of 12 key parameters, which act as aproxy for corporate PPA potential. The PPA Index focuses onfour pillars (three PPA-specific pillars together with a RECAI
score pillar):

The PPA Index uses a multiplicative formula to prioritize wellrounded markets with strengths in all aspects of corporate
PPA development and integration. For example, this will
mean that markets with zero PPA deals to date will score zero
overall and will not yet be included.

• PPA market maturity — this focuses on activities carriedout within each market in the past decade. It concentrates
on market maturity, looking at past PPA deal frequency andvolume, as well as a quantitative analysis of more recent
PPA deal growth.

However, with strong weighting on forward-looking
parameters, even markets with just a few deals to date could
score highly if significant growth is expected in the corporate
PPA market within the next five years — the horizon of RECAI.

• PPA future market — this forward-looking score assesses
the forecast activity of each market. Forecast power
capacity is a key driver of the magnitude of a market, so
this has a significant weighting on the score as well as
the wholesale power price relative to the levelized costof energy (LCOE) or PPA price in each market. Forecast
capacity installations and a weighted project pipeline scorefrom RECAI are used. The index has focused on wind andsolar PPAs (together weighted at 93%) as these represent
the vast majority of offsite corporate PPAs.
• PPA policy score — this focuses on the ease of operation ina given market. If a market is to have potential for corporate
PPA growth, supporting government policy must be in placefor efficient and large-scale expansion. This is consideredin the core RECAI, but is also examined here, with a morenuanced focus on PPA supportive policy.
• RECAI score — the overall score yielded by RECAI is also
factored in as one of the fundamental pillars, because it
provides a strong overview of the existing and potential
strength of a market’s renewable energy landscape.

The RECAI PPA Index score (which can be very large) has
been normalized into a score from 0 to 100, to create a moremanageable reference value. The leading market will score
100 — but this does not mean that the market is perfect forcorporate PPAs. It means that, relatively speaking, it is themost attractive market for corporate PPAs across the coming
five years.
Data sets are based on publicly available or purchased data,
EY analysis or adjustments to third-party data. We are unable
to publicly disclose the exact data sets or weightings used to
produce the indices.
For more information on the services that EY teams provide
to corporates around renewable energy strategies and PPAs,
please refer to our website: www.ey.com/uk/ppa.

(Sources: Pexapark, DLA Piper and EY analysis)
1. Number of PPAs signed in the past five years
2. Total PPA volume in the past five years
3. Number of PPAs signed in the past year
4. Total PPA volume in the past year

Foreword

RECAI 61

PPA future market(Sources: Wood Mackenzie, GlobalData, IRENA, IEA,
Pexapark and EY analysis)
1. Pipeline of projects:
a. Forecast power capacity
b. Forecast installation growthc. Project pipeline
2. Wholesale power pricing:a. Wholesale power price relative to the historic LCOE

Normalized index

PPA indexb. Wholesale power price relative to the PPA priceKey developments

PPA policy score(Sources: World Bank, GlobalData, IEA and EY analysis)
1. Ease of doing business index (World Bank)
2. Renewable energy imperative:• Renewable energy percentage of total generation• Percentage of population with access to electricity• Forecast energy consumption growth• CO2 emissions

Analysis

Regional focus

RECAI score

Data andmethodology(Source: EY analysis)
1. Macro fundamentals
2. Energy imperative
3. Policy
4. Project delivery
5. Technology

Contacts

Special thanks to Pexapark for providing access to their data.

Renewable Energy Country Attractiveness Index 61

06
26

Contacts

Foreword

RECAI 61
Arnaud de Giovanni

Ben Warren

Greg Matlock

Somesh Kumar

EY Global Renewables Leader

RECAI Chief Editor
Partner, Renewables Corporate
Finance, Ernst & Young LLP

EY Americas Energy Transition andRenewable Energy Leader
greg.matlock@ey.com

EY India Power & Utilities Leadersomesh.kumar@in.ey.com

arnaud.de.giovanni@fr.ey.com

Normalized index

bwarren@uk.ey.com

PPA index

Key developments
Andrew Horstead

Stephanie Chesnick

Sonal Agarwal

Bruno Bousquié

Michael Newman

Alex Lu

Kapil Bansal

EY Global Power & Utilities
Lead Analyst

EY Americas
Strategy and Transactions
Energy & Resources Leader

Associate Partner, Energy
Transition & Climate Strategy

Strategy and Transactions Leader
France, Ernst & Young Advisory

EY Oceania Renewables Leader
michael.newman@au.ey.com

Strategy and Transactions, EY
Corporate Advisors Pte. Ltd.

Partner, Ernst & Young LLP
kapil.bansal1@in.ey.com

bruno.bousquie@parthenon.ey.com

Associate Partner, Ernst & Young
Hua Ming LLP
alex.lu@cn.ey.com

ahorstead@uk.ey.com

stephanie.chesnick@ey.com

Analysis

sonal.agarwal@sg.ey.com

Regional focus

Data andmethodology

Contacts
Kiran K. Malla

Pankhuri Neb

Phil Dominy

Lavaanya Rekhi

Nathan Docker

Partner, Ernst & Young LLP

Senior, Ernst & Young LLPRECAI Advisor

kiran.malla@parthenon.ey.com

pankhuri.neb@uk.ey.com

Senior RECAI Advisor
Ernst & Young LLP
pdominy@uk.ey.com

EY UK&I Energy and Infrastructure
Corporate Finance Senior Executive

EY UK&I Energy and Infrastructure
Corporate Finance Senior Executive
Ernst & Young LLP
lrekhi@uk.ey.com

Ernst & Young LLP
nathan.docker@uk.ey.com
Renewable Energy Country Attractiveness Index 61

27

Citations

References
Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

28

Citations

References
Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 61

29

Citations

References
Foreword

RECAI 61

Normalized index

PPA index

Key developments

Analysis

Regional focus

Data andmethodology

Contacts

Renewable Energy Country Attractiveness Index 6130

EY | Building a better working world
EY exists to build a better working world, helping to create
long-term value for clients, people and society and build trustin the capital markets.
Enabled by data and technology, diverse EY teams in over 150
countries provide trust through assurance and help clients grow,transform and operate.
Working across assurance, consulting, law, strategy, tax andtransactions, EY teams ask better questions to find new answers
for the complex issues facing our world today.
EY refers to the global organization, and may refer to one or more, of the member
firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst &Young Global Limited, a UK company limited by guarantee, does not provide services
to clients. Information about how EY collects and uses personal data and a descriptionof the rights individuals have under data protection legislation are available via ey.com/
privacy. EY member firms do not practice law where prohibited by local laws. For more
information about our organization, please visit ey.com.
© 2023 EYGM Limited.
All Rights Reserved.
EYG no. 005518-23Gbl
BMC Agency
GA 174030779
ED NoneThis material has been prepared for general informational purposes only and is not intended to be relied upon as
accounting, tax, legal or other professional advice. Please refer to your advisors for specific advice.
The views of third parties set out in this publication are not necessarily the views of the global EY organization orits member firms. Moreover, they should be seen in the context of the time they were made.

ey.comBack