Institutional investors are demanding that businesses not only deliver financial performance, but also show how they make a positive contribution to society.
As a result, companies are having to re-evaluate their corporate strategies to curb their emissions, enhance their governance, and improve their climate-related disclosures. This has resulted in institutional investors increasing the capital they are allocating to renewable energy infrastructure as a means to hedge their climate exposure.
“The transition from fossil fuel to renewable fuel units is also an economic necessity, not just a climatic one. Some fossil fuel production units in Romania have a total production cost of approximately EUR90/MWh, while renewable units in Europe have costs even below EUR50-60/MWh. Romania can benefit from the support of European institutions for defining the necessary mechanisms to relaunch investments in renewables,” said Mihai Draghici, Senior Manager, Business Advisory Services, EY Romania.
For the first time since 2016, the US has secured the top position in the index. This is largely because of a short-term extension to the Production Tax Credit and long-term growth in offshore wind, with plans to invest US$57 billion to install up to 30 GW by 2030.
China’s growth in renewables has slowed, as the government looks to wean the market off subsidies towards a more competitive landscape. This, coupled with reduced demand as a result of COVID-19, has caused China to drop to second in the index, but forecasts remain optimistic for long-term growth.
France has moved up from the fourth position to third, securing strong power prices and awards of 1.4 GW for wind and solar developers in its latest auction, as it gradually weans its grid off nuclear power.
The report examines how large-scale energy storage is critical to decarbonizing electricity systems, as well as the conditions needed to encourage investment in utility-scale battery storage. As electricity grids decarbonize, vast amounts of energy storage will be needed, and utilities and developers are slowly ramping up investments in large-scale batteries.
According to the EY report, 12.6 GWh of battery storage is planned to be installed this year, making 2020 a record year for energy storage growth. And in the longer-term, a 13-fold increase in capacity growth, from around 17 GWh currently to 230 GWh by 2025, is anticipated.