Offshore Wind at Crossroads: High Costs, Supply Issues Halt Projects
The UK has dropped from the top spot to seventh in the Renewable Energy Country Attractiveness Index (RECAI) due to difficulties in the offshore wind sector. Global project costs have risen by 39% since 2019, and the UK’s maximum strike price was not enough to attract developers, causing a setback in reaching its target of 50GW of offshore capacity by 2030. Meanwhile, Nordic countries have climbed the rankings, with the US, Germany, and China retaining their positions as the top three markets.
UK Drops in Renewable Energy Attractiveness Index Amid Offshore Wind Challenges
The UK has slipped from the top spot in the Renewable Energy Country Attractiveness Index (RECAI), due to difficulties in the offshore wind sector. As project costs have risen 39% since 2019, the UK now ranks seventh, a significant setback for its goal of reaching 50GW of offshore capacity by 2030.
Meanwhile, Nordic countries have climbed the Index, despite Japan and Chile experiencing a drop in their rankings due to deployment challenges.
The offshore wind sector is at a turning point amidst the climate crisis. It’s vital to mitigate risks beyond the control of developers to ensure they achieve an acceptable return on investment. Tensions in the offshore supply chain could be eased by standardizing technologies and simplifying government strategies to speed up the consenting process.
Nordic Countries Rise; Japan and Chile Fall in Rankings
The US, Germany, and China continue to dominate the Index, thanks to substantial growth in their renewable sectors. However, Denmark, Sweden, and Norway have all made notable jumps in the Index, pursuing their renewable energy ambitions.
Japan, however, has fallen to 13th position due to lagging solar and wind deployment, while Chile has dropped to 16th, despite new battery storage targets, due to ongoing solar curtailment issues.
For a complete view of the RECAI Top 40 and analysis of the latest global renewable energy developments, visit ey.com/recai.
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