This report was completed between February and April 2012 and covers views from across the renewables industry, including corporates, financial investors, debt providers, governments and service providers. Survey respondents were spread across Europe (30 percent), North America (30 percent) and Asia-Pacific (30 percent), with the Middle East, Africa and South America accounting for the remainder.
Following a year of mixed fortunes for renewables, a positive note for the forthcoming period - our survey respondents are emphatic in the belief that renewables as an asset class is becoming increasingly attractive to long term investors, who continue to refine their understanding of risk profiles, and to apply this knowledge to appropriately price assets.
If renewables is to continue progressing, the next decade must be dominated by the race to remove subsidies. Looking beyond grid parity alone, industry stakeholders will need to work hand in hand with legislators and regulators to address the broader infrastructure implications of renewables for consumers (back up, connection costs and energy storage) in the overall cost and benefit analysis.
The industry recognises the challenges, and is supportive (and indeed bullish) of the drive to reduce costs; seeing it as essential to continued growth in the sector. Our survey results show that 73 percent of respondents expect new build to remain steady as costs are rapidly falling and grid parity is expected to be achieved for leading technologies within a few years (at least in certain sectors).
Likewise, whilst renewables has arguably experienced its toughest political and economic challenges in recent months, the industry believes that support for the sector across the board remains strong and will continue to deliver growth.
Over 40 percent of survey respondents selected China as the country from which new investors and acquirers are most likely to emerge during the next 18 months, followed by the USA (29 percent) and Germany (8 percent). Almost a quarter of respondents also believe that Japan will be amongst the top five countries from which new acquirers will emerge. Interestingly almost 20 percent of survey respondents also expect a significant number of new investors to emerge from South Korea during the next 18 months.
Emerging markets have become significantly more attractive to corporates and investors globally during the past twelve months. South America enters the top five list of targeted regions for the first time this year, being targeted by 13 percent of corporates and investors globally. Meanwhile Africa and Southeast Asia are now considered as attractive as the UK, with each securing 12 percent of corporate and investor survey respondents respectively in this year’s survey.
In many emerging markets the desire for renewable energy is being underpinned by a rapidly growing demand for energy. Indeed 52 percent of survey respondents seeking to invest in Central America cited market demand as their primary motive, which is at a similar level to responses concerning South America and India.
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