Romania fell one place in the quarterly ranking of the attractiveness of investment in renewable energy, shows an index made up on the subject by consulting and audit company EY. Compared to the previous edition, Romania is now ranked number 32 in a sector where quarterly investment made globally were close to 64 million dollars.
Valeriu Bining, Partner, Energy Industry Leader, EY Romania, believes the downward trend is on behalf of the compromise made by the authorities to respond to the interest of the large energy consumers in a context that calls into question the return on investment made in the renewable sector and the functionality of the power grid.
“This decrease occurs as a result of the effort made by the Romanian authorities to reconcile the positions of power consumers affected by the costs arising from the support scheme, those of investors who operate more than 6 billion euros in assets in this field and those of power grid operators that face the uncontrollable penetration of production capacity that changed the center of gravity of production in the country and increased the grid losses”, says Valeriu Binig.
The report considers 40 of the most attractive countries for investments in renewable energy. Overall, it appears that Asian economies are more interesting for investors than the more structured one in Europe and USA, that provide more moderate growths. Europe has the ability to become a world leader, but has significant constraints about access to capital, cross-border energy transport infrastructure and integrated supply chain, indicates the index developed by EY.
The deadlock in Congress and the long time necessary to obtain permits had a negative effect on US’s ability to maintain its first place, being the second, behind China. Only two traditionally attractive markets managed to keep their previous positions: Germany and Japan, the third and fourth place. Sharp falls were registered for the rankings of UK and Australia, seven and ten.
Meanwhile, Italy and Spain are now suffering the repercussions of changes brought to mechanisms destined to support the development of the renewable energy sector, both countries falling a few places in the index.
China is again the most attractive market for the financing of projects in this sector, says the report. The Chinese government places a growing emphasis on renewable energy in the fight against pollution, creating new market opportunities for foreign investors, mentions EY, on the basis of an aggressive public policy and the introduction of pilot schemes for trading carbon emissions.
India climbed to six place, due to the energy sector review done by the new government which aims to accelerate public and private investments in renewable energy.
Micro financing is important for the growth of investment volumes
The report emphasizes that micro finance schemes are becoming increasingly important for both developed countries and those developing, leading to an expansion of localized funding models, such as crowd funding. Capital resources available for such financing have significant potential for growth if risk-reward profiles could be structured as to become a viable alternative to other investment channels.
Far from being just a reminiscence of the “socially conscious” investor, crowd financing and funding from community sources is increasingly becoming a smart investment channel, playing an important role in shaping our new energy mix and in generating stimuli for the emergence of new funding models.