It ranks 11th among the 40 countries analysed by EY. Despite the impact of the Covid-19 in the short term, investors remain optimistic about clean energy in our country in the medium and long term
Investors remain optimistic about the Spanish renewable energy sector. This is reflected in the latest ‘Renewable Energy Country Attractiveness Index’ (RECAI) report prepared by the professional services firm EY (Ernst & Young), which was published recently and in which Spain stands out as one of the most attractive countries with the best growth prospects in terms of clean energy.
In fact, Spain improved four positions with respect to the previous report, going from 15th to 11th place in the ranking of the 40 countries analysed by EY, reaching a score in the RECAI index of 53.5 points. The list is led by the United States (65.8 points), followed by China (62.4) and France (60.8), with Spain achieving a better position than countries with a strong commitment to sustainability such as Canada (15th) and Sweden (22nd), Finland (24th) or Norway (26th)
The RECAI, which has been held every two years since 2003, ranks the world’s top 40 countries according to the attractiveness of their renewable energy investment and deployment opportunities. It focuses particularly on large-scale energy storage systems, which are critical to the process of decarbonising electricity systems: as dependence on coal decreases, more and better resources are needed to store energy.
Ambitious targets, the best guarantee for investors
As stated in the EY report, the Spanish renewable energy industry began 2020 with optimistic prospects, motivated by the governments ambitious targets in this area, and by the forecast of strong growth in unsubsidised commercial generation.
Although the pandemic caused by the Covid-19 has complicated the short-term outlook, the prospects remain good in the medium term, according to the report. This is largely due to the high priority the government has given to climate and energy policy reform. EY’s analysis highlights the Spanish National Energy and Climate Plan, presented to the European Commission last April, which establishes the objective of reducing emissions by 23% by 2030 – taking 1990 levels as a reference. In addition, the Plan foresees an increase in renewable energies: from 28GW in 2020, to 40GW in 2025 and 50GW in 2030 for wind energy; and from 8.4GW in 2020, to 22GW in 2025 and 39GW in 2030, for photovoltaic solar energy.
An increase that would follow the growth experienced by wind and solar energy during the past year. A year in which Spain positioned itself as the second European country that installed more wind energy – only behind the United Kingdom – and the first in investment in this area, with 2.8 billion. As indicated in the report ‘Wind Energy in Europe 2019’, by WindEurope, Spain installed 2.3GW of new wind energy, which was its highest installation rate since 2009, bringing the total to 25GW, according to Spain’s Red Eléctrica (REE).
In turn, according to SolarPower Europe data collected in the EY report, Spain became the leading European market in terms of increasing solar power capacity. Our country has added 4.2GW of photovoltaic solar energy, according to REE.
EY is no stranger to the force with which the Covid-19 pandemic has struck Spain. As they point out, pressure on international supply chains and difficulties in moving key personnel will delay the construction of some projects. However, they point to the government’s exemptions for developers, so that they could continue working on some clean energy projects during the temporary shutdown, so that manufacturers such as Vestas, Siemens Gamesa and LM Wind Power were able to resume production after the two-week shutdown in April.
The study also highlights that climate change and environmental, social and corporate governance criteria are increasingly strategic for companies globally, even influencing their value in the market. This is why institutional investors not only value the profitability of companies, but also their contribution to society.
In short, EY’s analysis considers that Spanish renewable energies are prepared to withstand the short-term storms caused by Covid-19, as they have the positive vision of the country held by investors and a clear direction for the future.
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- Our commitment to the 2030 Agenda