LONDON – Germany has overtaken China to become the second most attractive country in the world for renewables investment due to its efforts to speed up power market reform and move away from fossil fuels, research showed on Tuesday.
In an annual ranking of the top 40 renewable energy markets worldwide by consultancy EY, the United States was ranked first, with Germany climbing one place to second position for the first time in a decade.
Germany was Europe’s biggest buyer of Russian gas until the war in Ukraine and has also been reliant on nuclear and coal. However, it closed its last three nuclear power stations in April.
“While this is a major milestone in its progress to accelerated energy transition targets, there is likely to be an increase in the use of coal in the short term, to reduce the effects of intermittency in the power supply,” the report said.
Germany is aiming to have renewable make up 80% of its energy mix by 2030. Currently, renewable account for 46%, up from 41% at the start of 2022, the report said.
The United States held its top position in the index, supported by the passing of the Inflation Reduction Act last year, which earmarks $369 billion for investment in energy security and climate change.
However, there is a grid lock of renewable projects waiting to be connected to regional grids. Even though the offshore wind sector has grown, the U.S. administration’s goal of having 30 gigawatts (GW) of offshore wind by 2030 is likely to be missed by 10 GW, according to current construction dates announced by developers, the report said.
India moved ahead of Australia to sixth position in the index, due to the fast growth of its renewables industry, particularly solar.
Reporting by Nina Chestney; Editing by Kirsten Donovan