Sian Crampsie

European markets have fallen to new lows in EY’s latest Renewable Energy Country Attractiveness Index (RECAI).

EY says that "almost without exception", the European countries listed in the index have lost ground to less mature markets across Latin America, Africa and Asia.

These emerging markets now represent half of the countries in the 40-strong index and include four African markets in the top 30.

This compares to ten years ago, when only China and India were attractive enough to compete with more developed markets for renewable energy investment.

The index ranks 40 markets on the attractiveness of their renewable energy investment and deployment opportunities, based on a number of macro, energy market and technology-specific indicators. In the latest edition, Chile, Brazil and Mexico have climbed positions in the top ten, while Germany and France both fell.

The UK, meanwhile, has slipped to an all-time low of 13th place, EY said.

"Emerging markets are transforming their energy industries at an unprecedented pace," said Ben Warren, EY’s Energy Corporate Finance Leader. "Last year, renewable energy investments in the developing world overtook those in the developed world for the first time. Latin America, in particular, has become something of a litmus test for how quickly markets can grow."

Chile is one of the first markets to enable economically viable renewables projects to compete directly with all other energy sources. At the same time, Brazil’s renewables sector is showing surprising resilience amid an economic downturn and its underdeveloped solar market remains a potentially lucrative lure. And Mexico’s recent power auctions have opened the door to multi-billion dollar opportunities under a new liberalised energy market.

Meanwhile, European markets appear to be scaling back their ambitions as they address the challenges of marrying up increasingly mainstream renewables with a legacy of centralised conventional power generation.

Warren said that the UK’s "noncommittal approach to energy policy" had put the attractiveness of its renewables sector "on a landslide".

"The current approach is going against the grain of almost universal global support for renewables and is masking the UK’s advantages – a growing energy imperative as ageing power plants are retired, strong natural resources and efficient capital markets," said Warren. "In the absence of real changes to the direction of policy support and greater demand for renewables in the energy generation mix post 2020, the only way for the UK in our Index seems to be down."